Nearly entire CA House delegation – including 4 Republicans – backs cannabis banking

More than three-quarters of California’s local governments have declined to authorize retail stores to sell cannabis, as permitted by state voters with their 2016 approval of Proposition 64. Opposition has been led by moderate Democrats and conservative Republicans unconvinced that making the drug readily available for recreational use is good for society.

But much of California’s House delegation is supportive of helping the marijuana industry achieve a key goal: access to the banking system. Even with cannabis now legal in some form in 33 states, the great majority of banks and credit unions in the Golden State and elsewhere have declined to do business with marijuana-related businesses because possession and sale of the drug remain illegal under federal law.

Last week, the House passed the Secure and Fair Enforcement Banking Act 321 to 103. Every California Democrat backed the measure and so did four of the state’s seven Republican members: Majority Leader Kevin McCarthy of Bakersfield, Tom McClintock of Elk Grove, Devin Nunes of Tulare and Duncan Hunter of Alpine.

The passage of the bill after past efforts went nowhere was widely credited to a change in focus in lobbying. Leading the push this time was lobbyists for the financial services industry itself – not the cannabis industry. They argued that making a multibillion-dollar industry use cash only created headaches and safety risks for the many legitimate, longstanding businesses that dealt with cannabis companies.

Bankers say other businesses shouldn’t be inconvenienced

American Bankers Association President and CEO Rob Nichols told Politico, “The most compelling arguments have been centered around these secondary relationships. It’s the local plumber, it’s the local electrician, it’s the attorney, it’s the accountant who are doing business with a cannabis grower or dispensary who are then having challenges associated with getting banking products and services.”

The American Financial Services Association focused its lobbying on McCarthy and Speaker Nancy Pelosi, D-San Francisco, also emphasizing the need to stop inconveniencing so many established businesses.

The fate of the SAFE bill in the Senate is unclear. Senate Banking Committee Chairman Mike Crapo, R-Idaho, has said that he will schedule a hearing on the bill, but his aides said that should not be interpreted as support.

California’s Democratic senators, Dianne Feinstein and Kamala Harris, are expected to be supportive. After 35 years as a staunch supporter of the drug war, Feinstein reversed course in spring 2018.

“My state has legalized marijuana for personal use, and as California continues to implement this law, we need to ensure we have strong safety rules to prevent impaired driving and youth access, similar to other public health issues like alcohol,” she told a McClatchy reporter.

Harris has also changed her position. In 2010, while running for California attorney general, she opposed an initiative to legalize recreational marijuana use. 

“Spending two decades in courtrooms, Harris believes that drug selling harms communities,” her aide told Capitol Weekly. “Harris supports the legal use of medicinal marijuana but does not support anything beyond that.”

But her position softened over the years, and last year she signed on as a co-sponsor of a bill by Sen. Cory Booker, D-New Jersey, that would make cannabis legal under federal law.