August 16, 2022

Cannabis Regulators of Color Coalition Releases White Paper Critical of SAFE Banking Act

August 16, 2022
SAFE Banking Act

As the momentum for cannabis legalization grows, social equity continues to be a key issue for the industry and politics on both sides of the aisle. The impact of the cannabis prohibition that devastated communities across the country still reverberates today. The Cannabis Regulators of Color Coalition (CRCC) seeks to help repair this damage by educating political leaders on cannabis and the business ecosystem and guiding revisions of the SAFE Banking Act, proposed legislation facilitating financial services in the United States cannabis industry. Today, CRCC released its white paper, “Not a SAFE Bet: Equitable Access to Cannabis Banking,” which details how the SAFE Banking Act is far from a safe bet to realize fair and equitable access to financial services in the cannabis industry.

“Not a SAFE Bet” identifies key challenges and provides powerful solutions that will ensure the SAFE Banking Act provides equitable access to financial services.

Cannabis Regulators of Color Coalition’s White Paper: Not a SAFE Bet

Not a SAFE Bet is the latest project from CRCC, published by The Ohio State University Moritz College of Law Drug Enforcement and Policy Center. The white paper explores and analyzes the SAFE Banking Act, then makes the case for why the bill, as it is currently written, will not resolve the many problems in the financial sector of the cannabis industry.

It will be supported by a panel discussion on August 17, 2022, that will take a regulatory deep dive into the paper’s analysis of the SAFE Banking Act and how its current iteration falls short of its goals, as well as recommendations to improve fair access to cannabis banking.  Free registration for the panel discussion can be found here (see more info below)

Dasheeda Dawson, thought leader, Founding Chair of CRCC, and Cannabis Program Manager for the City of Portland, said, “This is the first time the City of Portland’s Cannabis Program has been published in this way, and we are very proud of this. A lot of people in the cannabis industry are conflating the SAFE Banking Act with what they hope to see for cannabis companies in banking, but in fact that is not what’s in the current bill. CRCC has been looking for smart solutions that are equity-centered and banking specific for over a year. The biggest takeaway is that there is a BIG difference between increased access and equitable access. We are trying to ensure that we set the record straight and that everyone understands what is likely to happen if we keep the bill as-is.”

She also mentioned that none of the CRCC recommendations are purposely intended to replace a more comprehensive bill about banking. “We do not address 280e in the sense of taking it away [in our recommendations], because it’s a tax issue, not a banking issue,” she explained.

https://twitter.com/DasheedaDawson/status/1559646303872684032

Co-author Cat Packer, Distinguished Cannabis Policy Practitioner in Residence, Drug Enforcement and Policy Center, Moritz College of Law, The Ohio State University and Vice Chair, Cannabis Regulators of Color Coalition said, “We have both an opportunity and responsibility to pass cannabis banking reform that not only increases access to cannabis banking but that also seeks to ensure that access to cannabis banking is equitable.”

Packer added, “Not A SAFE Bet includes our analysis of the SAFE Banking Act, why it is unlikely to result in equitable access to cannabis banking, and recommendations to more equitably achieve cannabis banking reform.”

The Cannabis Industry, Equity, and the SAFE Banking Act

Without intervention, the inequities in the cannabis industry are likely to persist or worsen for cannabis businesses experiencing compounded racial and socioeconomic barriers. To correct these inequities, the panel will detail the white paper’s key recommendations to improve the bill and fulfill its stated goals. These recommendations include:

  • Using the tax revenue collected as part of Internal Revenue Code Section 280E to create a fund to provide capital for businesses owned by people harmed by the War on Drugs. 
  • Requiring financial institutions to demonstrate compliance with anti-discrimination laws, such as the Equal Credit Opportunity Act.
  • Clearly stating that cannabis criminal records are no longer an automatic red flag that suggests the potential illegal activity of the business.

“This white paper underscores the need to ensure that fair and equitable banking is explicitly addressed in the SAFE Banking bill,” says Maritza Perez, Director, Office of Federal Affairs, Drug Policy Alliance. “Time and time again, we have seen people of color excluded from the regulated marijuana market despite carrying a disproportionate burden when it comes to marijuana enforcement. Congress must not pass the SAFE Banking bill without first incorporating meaningful reforms.” 

The expansion of the cannabis industry provides the nation with a new opportunity to correct the mistakes of the past. CRCC is actively working with federal and state lawmakers to center equity and inclusion in cannabis policy and regulations. The organization stands at the forefront of the growing movement to embed equity and justice into the foundation of a powerful new industry.

The CRCC paper can be found here.

Cannabis Regulators of Color Coalition Hosts Virtual Discussion Proposing Amendments to the SAFE Banking Act

Hundreds join the conversation about making critical cannabis banking services equitable for all 

While national cannabis legalization efforts have stalled amidst political gridlock, lobbyists for the growing industry are pushing for passage of the SAFE Banking Act, which would allow depository institutions to provide financial services to licensed cannabis businesses. This incremental step toward legalization, if enacted in its current form, threatens to widen inequities between well-funded multistate operators and other corporate interests and small businesses, particularly those from communities most harmed by cannabis prohibition. Committed to centering equity in every aspect of the legal cannabis industry, the Cannabis Regulators of Color Coalition (CRCC) released its seminal white paper,  “Not a SAFE Bet: Equitable Access to Cannabis Banking,” detailing the biggest challenges of the SAFE Banking Act and proposing real solutions to ensure fair and equitable access to financial services. 

On August 17, 2022, in partnership with The Ohio State University Moritz College of Law’s Drug Enforcement and Policy Center (DEPC), CRCC held a virtual panel to discuss solutions to the shortcomings of the SAFE Banking Act. This event, part of the DEPC’s Cannabis Regulatory Deep Dive series, supported the Coalition’s white paper, released earlier this week.

Over 300 people registered from across the country to join CRCC for an informative conversation about SAFE and the strategies to make the proposed financial services legislation more equitable for the entire industry, as support for the CRCC white paper and its incisive improvements to the existing legislation poured in.

“For decades, largely Black and Brown communities have been disproportionately harmed by the prohibition of marijuana and are subsequently underrepresented in the emerging billion-dollar cannabis industry,” says Senator Cory Booker (D-NJ). “We all agree that the path to ensuring true equity within the marijuana industry starts with decriminalizing cannabis at the federal level. Before moving forward, legislation like SAFE Banking requires changes to ensure that the communities most harmed by our broken marijuana policies receive support and small cannabis businesses can have the same access to capital as large multi-state operators.”

“One of the biggest threats to the ideal of social equity in cannabis is the conflation of equity with criminal justice reform or other half measures that distract from the reality that equity must be addressed, and thereby fully achieved, in every nuanced aspect of legalization,” says Dr. Rachel Knox, MD, MBA, Co-founder, and President, CHEM. “I am proud to stand behind the organization’s honest analysis of the SAFE Banking Act, offering immediate and relevant equity-centered solutions that are specific to banking – an institution in America that is itself wrought with racial and social inequities. The Cannabis Health Equity Movement (CHEM) teaches that equity is infrastructural, and it’s refreshing to finally see thought leadership challenge legislation that fails to recognize this.”

“Section 280E should not apply to cannabis sales, but while the federal government is taking that revenue anyway, it should use it to provide capital to businesses that can’t access it. CRCC is raising solutions to the problems cannabis businesses actually face today. Solutions that also address the harm the drug war created.” – Wanda James, Founder, and CEO, Simply Pure

As a small operator, we often get told what we need instead of asked. CRCC is taking the time to engage with business owners of color and together develop ways that SAFE could be changed to address our current challenges.” – Amber Senter, ED, Supernova Women

“Our young people and student members stand for policy based on evidence, compassion, and human rights, which includes economic drug policy. We appreciate CRCC’s commitment to continuously offering sensible solutions despite the industries’ insistence on corporate greed being more important than human lives. If banks want a safe harbor, they should be willing to demonstrate they comply with all applicable laws, including anti-discrimination laws, and include policies that benefit our people directly. Until they do that, the gridlock will continue.” –Jason Ortiz, ED, SSDP

CRCC

Cannabis Regulators of Color Coalition (CRCC)

The Cannabis Regulators of Color Coalition (CRCC) is a coalition of government officials appointed or elected to lead, manage, and oversee regulatory and policy implementation for legal medical and adult-use cannabis markets across the nation and abroad. As leaders in post-prohibition cannabis policy, we focus on equity-centered regulation, industry best practices, and cannabis competency and standardization.

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