A marijuana financial services company has revised its testimony on a congressional cannabis banking bill following pushback over remarks made at a Senate committee hearing this month where a compliance officer suggested a “pause” to further amend the legislation.
Advocates and stakeholders were taken aback by the suggestion from Dama Financial, as it seemed to undermine efforts to show a united front eager to advance the Secure and Fair Enforcement (SAFE) Banking Act.
But shortly after the Senate Banking Committee hearing, Dama CEO Patrick O’Boyle said that the company “regret[s] that our testimony did not highlight the bill’s merits and the urgent need for its passing,” and they’d be working with stakeholders to revise their comments to the committee.
“We value your partnership and appreciate your understanding,” O’Boyle said. “Rest assured that we remain dedicated to serving your business and supporting your growth and success as well as the supporting the success of the cannabis industry.”
On Wednesday, Dama released the updated testimony to Banking Committee leadership. It says that the company “took an overly myopic focus drafting our testimony on banking compliance rather than balancing the testimony with why the benefits of the legislation outweigh the desire for future enhancements” and offered new comments.
The status quo of federal prohibition has prevented the cannabis industry from accessing traditional financial services in a way that “has resulted in many businesses operating primarily with cash, which is not only an inefficient business practice, it also is a threat to public safety for businesses and our communities.”
“It is an unnecessary risk that welcomes theft, robberies, burglaries and unfortunately even deaths,” O’Boyle said. “By preventing federal agencies from taking action against entities that provide financial services to licensed operators and cannabis-related businesses, the SAFE Banking Act would cohesively bring federal and state law together.”
“The American people deserve a smart economic policy which illuminates liability for depository institutions offering financial services to legally licensed cannabis operators and cannabis-related businesses. While there is need to address other compliance and banking enhancements for the industry, Dama believes these enhancements should not hold up the passing of the SAFE Banking Act, S. 1323t now, as a first step to improving the industry’s access to financial services and products.
The cannabis industry continues to show growth in the U.S. market and is developing at a faster rate as more states are transitioning from medical-only to fully legal in a shorter time frame—now is not the time to stunt the financial infrastructure that would support this growth. By giving financial institutions the ability to work with cannabis businesses and supporting the SAFE Banking Act, the Senate would not only help safeguard Americans by reducing cash on the streets, but would also be supporting smart economic policies that greatly contribute to our country’s financial health.”
Kim Rivers, CEO of the multi-state marijuana company Trulieve, had reached out to Dama following the initial committee testimony and received assurances that they would be correcting the record on their position.
Just spoke to the CEO at @DamaFinancial. I am hopeful they will be issuing a statement into the committee record making it clear that they do support SAFE in its current form and that it does provide a workable structure for the industry. Appreciate the opportunity to connect and…
— Kim Rivers (@rivers_kim) May 15, 2023
She thanked the company on Wednesday for following through, though some observers like lobbyist Don Murphy of the Marijuana Leadership Campaign feel “any damage is done” following the in-person testimony.
Thanks for your effort, but at this point, any damage is done. Like a front page error corrected on the back page. This looks more like a case of crisis management than a real attempt to change the record. What a missed opportunity. SMH.
— Don Murphy (@donmurphy12a) May 24, 2023
In any case, the next step for the SAFE Banking Act is to receive a committee markup, which Senate Majority Leader Chuck Schumer (D-NY) said he hopes will happen “in the near future.”
The plan is to pass the clean standalone bill out of committee—and then to offer amendments on the floor. Schumer and colleagues have emphasized that the legislation should be revised to include “criminal justice” provisions such as record expungements for people with prior marijuana convictions.
It’s also possible that the bill will be amended to account for concerns flagged by a Democratic senator, key federal officials and consumer advocacy groups, who said recently that a specific provision of the bill could inadvertently limit the ability of regulators to take action against people exploiting banking services.
A coalition of groups separately sent a letter to committee leadership last week calling for an expansion of the bill’s financial protections to permit cannabis industry access to major U.S. stock exchanges—a request that’s faced some criticism from other advocates who say that would be an inappropriate move to help businesses while efforts to legalize marijuana stall in Congress.
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Sen. Jacky Rosen (D-NV) also recently said that she wanted the SAFE Banking Act to pass with an amendment allowing cannabis businesses to access federal Small Business Administration (SBA) services.
Last month, Schumer said that he was “disappointed” that a so-called SAFE Plus package of cannabis reform legislation didn’t advance last year, saying “we came close,” but “we ran into opposition in the last minute.” He said lawmakers will continue to “work in a bipartisan way” to get the job done.
The majority leader has been holding meetings with Democratic and Republican members in the early months of the new Congress to discuss cannabis reform proposals that might have bipartisan buy-in this year.
Sen. Cory Booker (D-NJ) said recently that lawmakers are working to “resurrect” the cannabis reform package, acknowledging that failure to advance a banking fix for the industry “literally means that hundreds of businesses go out of business.
Rep. Earl Blumenauer (D-OR), who is a lead sponsor of the House version of the SAFE Banking Act, said at a recent press briefing that thinks it’s important that advocates and lawmakers align on any incremental proposals to end the drug war, warning against an “all-or-nothing” mentality.
The American Bankers Association (ABA) also recently renewed its call for the passage of the legislation. And all 50 of its state chapters did the same, as did insurance and union organizations, in recent letters to congressional leadership.
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