Some progress is better than no progress at all. While marijuana advocates, industry stakeholders, and lawmakers have been actively promoting the inclusion of cannabis businesses into COVID-19 related legislation, some forward motion has been made. On May 12, House leadership revealed a COVID-19 relief bill that contains provisions of cannabis business insurance. This would protect banks that serve state-legal cannabis businesses from federal regulatory penalties.
Marijuana advocates haven’t managed to secure access to the federal Small Business Administration (SBA) relief programs. However, this little victory means that in addition to insurance access provisions, the language of the Secure and Fair Enforcement (SAFE) Banking Act has been included in a standalone bill that will be included in the newest 1,815-page COVID-19 relief package.
Co-mingling the state legal/federally illegal status of cannabis has been a tricky proposition. The SBA explicitly prohibits cannabis businesses — and any ancillary businesses — from receiving any COVID-19 related financial relief because of its federal status.
Oregon’s Representative Earl Blumenauer (D) wants to change that. He introduced a bill in April that called for SBA access for cannabis businesses and ancillary companies, such as cannabis law firms and accounting companies. Blumenauer managed to get a letter with 34 bipartisan members of the House that urged leadership to include policy changes in subsequent COVID-19 bills.
In a press release, Justin Strekal, NORML’s political director, acknowledged that the SAFE Banking Act’s language inclusion “is a positive development, but one that’s akin to applying a band-aid to a gaping wound.” The press release continued, “In the majority of states, these cannabis businesses have been deemed essential during this pandemic. But at the federal level, they are being cast aside by Congress. Those small cannabis businesses facing tough economic times are essentially being told by Congress to shutter their doors and fire their employees.”
The legislation would essentially provide liability protection to those financial services companies (i.e., insurance) with clients that are compliant with state laws involving the marijuana industry. This could not only change the business climate of the entire sector but actively legitimize it.
