Counties and Cities Are Lobbying on the SAFE Banking Act

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Counties and cities across California, Nevada, and Oregon are joining the big push for access to financial services for the cannabis industry, lobbying Congress to address the regulatory and public safety concerns that arise around an all-cash business. 

“We have business owners coming to City Hall to make deposits, sometimes carrying large sums of cash,” Javier Trujillo, the director of government and public affairs for the City of Henderson, Nevada, told Cannabis Wire. “It could be in the tens of thousands, if not more sometimes, and they do it twice a year,” at tax time.

The safety of the business owners, the communities they operate in, as well as the City Council staff, is at risk as a result, Trujillo said. “It would be nicer to get a check,” he said. 

The industry is mostly forced to deal in cash, of course, because as cannabis remains illegal at the federal level, and this week, House lawmakers are scheduled to vote on the SAFE Banking Act, which would solve that problem, if passed. Cannabis Wire dug into lobbying disclosures and talked to local officials, and found that even on a local level, jurisdictions in legal cannabis states are focused on a national banking solution for cannabis businesses to address the problems that come with being forced to run an all-cash business.  

Rural counties, in particular, are not equipped to secure tens of thousands of dollars, Paul Smith, vice president of governmental affairs with the Rural County Representatives of California told Cannabis Wire. 

Jurisdictions also have a hard time auditing cannabis businesses in the absence of bank statements. “It makes it difficult as a regulatory body to do our job,” Trujillo said. “We want to make sure that none of these dollars are being used for any illicit activity.” Without banking records, jurisdictions also don’t know if they’re collecting adequate local tax from the businesses either, Smith added. 

The Rural County Representatives of California is doing everything it can to get the maximum amount of votes to pass the SAFE Banking Act, Smith said. 

“And then all eyes will be on the Senate,” he added. Both Smith and Trujillo anticipate that the real challenge lies in getting the Act through  the Republican-controlled Senate. 

Some advocacy groups, such as Drug Policy Alliance and American Civil Liberties Union, and some politicians, such as Representative Alexandria Ocasio-Cortez, are pushing for the SAFE Banking Act vote to be postponed until cannabis legalization legislation with a criminal justice focus is considered. But Smith, for one, disagrees, arguing   that “the perfect cannot be the enemy of the good.”

“I think we need to get the cash out of the industry,” Smith said. 

Beyond the SAFE Banking Act, local jurisdictions are also lobbying on other issues, including  the STATES Act and hemp regulations. Sean Quincey, the Deputy County Administrative Officer of Humboldt County in California , told Cannabis Wire that the county is focusing its efforts on the two bills that have the best shot of advancing—the SAFE Banking Act and the STATES Act—while following “dozens” of other cannabis-related bills. The STATES Act would mean a hands off federal approach to state-legal cannabis business.  

Meanwhile, the US Department of Agriculture and the Food and Drug Administration are both expected to release rules on the domestic hemp production program and around CBD-based products like foods and supplements this fall. As Cannabis Wire reported last week, the Department of Agriculture submitted its  hemp rules to the White House Office of Management and Budget for interagency review on June 27. 

Imperial County in California, which lobbied on hemp regulations at the federal level, is eagerly awaiting the USDA’s interim final rule for hemp, Linsey Dale, public information officer with the county told Cannabis Wire. “Looking ahead, the County will also be urging federal regulators and Congress to develop rules legalizing hemp-derived CBD in food and drug products,” she said.

The full list of local jurisdictions that lobbied on the SAFE Banking Act, STATES Act, hemp regulations, medical cannabis, and other cannabis-related legislation at the federal level in 2019:

City Of Desert Hot Springs, California

City Of Emeryville, California

City Of Henderson, Nevada

City Of Medford, Oregon

City Of Oakland, California

City Of Sacramento, California

City of Portland, Oregon

County Of Monterey, California

County of Tulare, California

Humboldt County, California

Imperial County, California

Marin County California

Pasco County, Florida

Rural County Representatives Of California

California State Association of Counties

Santa Clara County, California

Solano County, California

Office of the Governor, State of Colorado

State Of Nevada

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