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Law360 (May 19, 2020, 9:44 PM EDT ) A group of 34 attorneys general on Tuesday urged Congress to include protections for banks that serve marijuana clients in upcoming coronavirus relief legislation, with seven Republicans joining the call in a break with GOP leadership.
The letter's authors, led by Colorado Attorney General Phil Weiser and North Dakota Attorney General Wayne Stenehjem, stressed the bipartisan nature of their effort and emphasized the public safety benefits of reducing the cannabis industry's dependency on cash. The pandemic has made the problem especially acute, the officials said.
"Many legitimate businesses have been pushed into cash-dependent models because they don't have access to the federal banking system," Weiser said in a statement Tuesday. "At a time when COVID-19 has exacerbated health and safety concerns related to cash exchanges, now more than ever it is vital Congress act on this point."
The letter comes as cannabis legislation folded into a $3 trillion relief bill known as the Heroes Act, which narrowly passed in the House last Friday, heads to the Senate, where the Republican majority has characterized the legislation as an "1,800-page seasonal catalog of left-wing oddities."
Elected officials and cannabis groups have long championed the SAFE Banking Act, which would shield banks that deal with cannabis businesses from federal sanction, as a remedy to cash dependence in the marijuana industry. The bill passed the House last year but remains stuck in committee in the Senate, where Sen. Cory Gardner, R-Colo., is angling to broker a deal with his GOP colleagues.
The attorneys general said language similar to that of the SAFE Banking Act should be included in the next coronavirus relief bill, saying the crisis makes the need for reform all the more apparent.
"The current predicament of a rapidly expanding national marketplace without access to the national banking systems has resulted in an untenable situation," the letter states. "We stress that current legislative models are available to fix this situation."
Threats to public safety stemming from the marijuana industry's cash-intensive business model have intensified in the months since the COVID-19 pandemic reached the U.S., the letter said. Cash transactions can also speed transmission of the virus, the authors said.
"The ability to efficiently collect tax revenue from the marijuana industry, estimated to have generated $15 billion in sales in 2019, will provide critical relief for state and local governments predicting budget shortfalls due to the pandemic," the letter stated.
The letter also reprised assurances by SAFE Banking Act proponents that the legislation is not a stalking horse for federal legalization, but rather a pragmatic acknowledgment of the "realities on the ground" in the dozens of states that have ended prohibition in some form. Freeing banks to deal with marijuana clients would be an "embrace of our federalist system of government that is flexible enough to accommodate divergent state approaches," the authors said.
The cannabis industry and its allies in Congress have also pressed for changes to coronavirus relief bills that would allow marijuana businesses to tap disaster funds from the Small Business Administration, which is currently barred from doling out funds to the industry.
--Editing by Alanna Weissman.
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