COVID-19 Relief Bill Passed By House Allows Cannabis Banking

The Health and Economic Recovery Omnibus Emergency Solutions Act (or HEROES Act), the latest legislation to provide economic support during the COVID-19 pandemic, was approved by the House of Representatives last week. It provides $3 trillion for COVID-19 relief and includes local and state government funding in the billions, extended unemployment benefits, assistance for farmers and the United States Postal Service, funding for COVID-19 testing and tracing, and most notably for cannabis advocates, allowance for banks and other financial institutions to work with cannabis or cannabis-related businesses without being penalized. 

The pandemic has significantly affected the cannabis business but due to cannabis being illegal under federal law, federal financial assistance for growers, processors, dispensaries and related cannabis companies is not allowed. These new allowances, which will prevent banks working with cannabis companies from being criminally prosecuted, come from the Secure and Fair Enforcement (SAFE) Banking Act, which already passed the House of Representatives on its own last year (though it did not pass the Senate).

Executive Director of the Marijuana Policy Project Steve Hawkins praised the House’s inclusion of the SAFE Banking Act in the HEROES Act.

“I’m encouraged that the House recognizes the urgency of this issue and has taken this strong and necessary position,” Hawkins said in a press release. “Continuing to exclude the cannabis industry from accessing basic and essential financial services during this time will result in more harm than good.” 

Political Director for the National Organization for the Reform of Marijuana Laws (NORML) Justin Strekal called the inclusion of the SAFE Banking Act “a positive development,” but noted that more needs to be done.

“In the majority of states, these cannabis businesses have been deemed essential during this pandemic,” Strekal said in a press release. “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.”

Senate Republicans have been critical of the HEROES Act. Mitch McConnell, the Senate Majority Leader, called the HEROES Act “an 1800-page liberal wishlist,” on Fox News and specifically focused on the inclusion of the SAFE Banking Act. 

“Just to give you an example of some of the absurdity: there’s money in there for illegal immigrants, it mentions the word ‘cannabis’ of all things—68 times more than the word ‘jobs,’” McConnell said. 

Many other Republicans have repeated similar critiques of the HEROES Act, ignoring how making it easier for cannabis companies to receive loans and other relief from banks will lead to the loss of fewer jobs and create more jobs. 

Not included in the HEROES Act however, is anything about cannabis companies and the Small Business Administration. Cannabis advocates and Democratic senators have been demanding for quite some time that cannabis companies be eligible for assistance from the SBA, which is currently not allowed because again, cannabis remains illegal under federal law.

“While larger, better capitalized players may be able to weather this storm, smaller cannabis businesses may not be able to do so absent some economic stimulus,” Strekal said. “By continuing to deny these small businesses eligibility to SBA assistance, it is possible that we could see an acceleration of the corporatization of the cannabis industry in a manner that is inconsistent with the values and desires of many within the cannabis space.”

COVID-19 Relief Bill Passed By House Allows Cannabis Banking

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COVID-19 Relief Bill Passed By House Allows Cannabis Banking

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