Both sides of the U.S. Senate addressed Wednesday the issue of bank access for marijuana businesses at a congressional hearing. A Republican senator suggested the need to examine federal cannabis policies more broadly.
In the meantime, another House committee met in order to address banking concerns, during which unique financial issues faced by the marijuana sector were raised.
The repeated mentions of cannabis businesses at the Senate Banking Committee hearing were all the more notable considering that the panel’s chairman, Sen. Tim Scott (R-SC), emphasized on multiple occasions—before and during the meeting—that the focus should be on de-banking issues for “federally legal” companies.
Nevertheless, both Democrats and Republicans have called attention to this industry.
As an example, in her opening remarks Sen. Elizabeth Warren’s (D-MA), noted that: “Lawful cannabis businesses are unable to create accounts. Employees of these businesses have also been denied banking services.”
The senator said, “This should not be happening. We need to find out why it is and who’s responsible.” He also shared stories of marijuana companies that were impacted by the debanking.
Sen. Thom Tillis, R-NC, however, has questioned whether it is appropriate to discuss marijuana banking within the context of debanking, given the fact that “the cannabis business was illegal on a federal scale the last time I checked.” He did say he’d be willing to investigate this disconnect in policy.
I, for one think that we need to reexamine [federal marijuana laws]We should not pass a law that makes it legal by default before taking a firm position that gives clarity to the industry. It seems that he was referring to the Secure and Fair Enforcement Banking Act, not the Bank Secrecy Act.
“If somebody wants to work on rules of the road and do that—and bank the industry in a cohesive, sustainable way that doesn’t kind of skirt around the fact that it’s still illegal at the federal level—count me in. Tillis was happy to take part.
Tillis stated in December last year that he hopes Congress has a discussion about creating a potential federal regulatory framework by 2025. He added, however, that he would not vote for federal legalization of cannabis.
Jack Reed (D – RI) noted also at the Banking Committee’s hearing that panel members “had a positive discussion about SAFE Banking Act” and he is looking forward to work with colleagues “to find a compromise which would allow for reputational risk, while putting up some guardrails regarding its application.”
Aaron Klein of the Brookings Institution also spoke briefly about the cannabis banking problem at the hearing, after having submitted written testimonies wherein he suggested that the committee combine SAFE Banking (Safe Banking) with wider [suspicious activity reports, or SARs] “Reform or improve SAFE Banking in order to deal with the problem of SARs filed on cannabis businesses licensed by state.”
Stephen Gannon of Davis Wright Tremaine LLP also spoke at the hearing about his personal experience of a vineyard where the owner’s wife was an investor in cannabis. “The vineyard, and all the people who own it, lost everything,” he said. [bank] accounts.”
The accounts were all gone. I think it was an effect of the regulatory agencies, since they didn’t have anything to do with cannabis.
Before the hearing began, cannabis workers and their associations told the committee about how they had lost their bank account due to their involvement with the drug.
Kyle Sherman CEO of FlowHub a non-plant touching technology platform for the cannabis industry, coordinated a part of the outreach.
Sherman, who told MEDCAN24 that he had his letter addressing marijuana bankrupting recorded by the chairperson before the hearing began on Wednesday, said over 115 cannabis and cannabis-related businesses also shared their experience with the Committee through a custom form submission portal FlowHub designed.
The Senate Banking Committee is holding a hearing about debanking. The debanking hearing of the Senate Banking Committee is on my agenda. @SenatorTimScott I would like to thank the committee for recording my testimony. Software companies that are federally legal @FlowhubCo has been debanked numerous times along with many…
— Kyle Sherman (@KyleSherman) February 5, 2025
Sherman had also the opportunity to speak to Warren on Wednesday. He said that the senator was clear in her statement, “This is a top priority, it needs to be done, and she is extremely supportive of SAFER Banking.”
He said Warren expressed her understanding that her state of Massachusetts has a “robust” cannabis market and “realizes they need help—and then, more broadly, the industry needs help, and that this is really important.”
Quick Chat @SenWarren The need for reforming banking in the Cannabis industry and SAFER Banking. She wants this to move forward. Appreciate your support Senator. pic.twitter.com/SsLEWAuw7d
— Kyle Sherman (@KyleSherman) February 5, 2025
FlowHub stated in its letter to the Committee that Congress had the chance to “fulfill President Trump’s commitment to his campaign by advancing bank reform and ending Operation Chokepoint” for American companies like Flowhub, referring to Trump’s declared support on the campaign road for banking access for the cannabis industry.
“President Trump has explicitly endorsed state-legal cannabis banking reform, and, in this ‘Promises Made, Promises Kept’ and ‘Revolution of Common Sense’ administration, Flowhub is optimistic that Congress will deliver meaningful relief to the state-legal cannabis industry, the ancillary businesses that support it, and their collective hundreds of thousands, if not millions, of American workers,” the letter says.
USCR (U.S. Cannabis Roundtable) has also submitted a document that emphasizes the SAFE Banking Act does not “federally legalize”, “changes criminal penalties for conduct related with cannabis” or “require banks to provide services to cannabis businesses.”
The USCR stated that “the SAFE Banking Act enables financial institutions to provide services and interact with state-legal businesses without fear of reprisals.”
The report stated that no business was at risk of debanking, particularly if the company complied with all state regulations and licensing requirements.
Separately, the House Financial Services Committee also held a hearing on Wednesday to discuss improvements to the community banking sector, and one witness—Cathy Owen, representing Eagle Bank and Trust Company, the Arkansas Bankers Association and the American Bankers Association—also flagged cannabis industry financial challenges in her written testimony.
Owens’ recommendation to the Committee was “enacting the SAFE Banking Act” to remove state sanctioned cash from the street, and put it into financial institutions that are regulated. It would make communities safer while making the cannabis industry transparent to tax authorities, regulators and law enforcers.
Meanwhile, congressional researchers recently released a report detailing the subject of debanking—while making a point to address how the marijuana industry’s financial services access problem “sits at the nexus” of a state-federal policy conflict that complicates the debate.
While the SAFE Banking Act to address the issue is expected to be filed again this session—that introduction is “not imminent” as some recent reports have suggested, a spokesperson for the GOP House sponsor of the last version told MEDCAN24 last month.
The staffer of Rep. Dave Joyce, R-OH said: “While the introduction isn’t imminent, we are hoping to provide a more firm update in the next few weeks.”
With Republicans now in control of the House and Senate—and leadership having historically opposed even modest cannabis legislation, including the banking bill—there are open questions about the prospects of advancing marijuana reform this session.
Some people are hopeful, however, that President Donald Trump will support the initiative on his campaign trail.
Separately, the Government Accountability Office (GAO) announced in December that it’s convening focus groups comprised of marijuana businesses to better understand their experiences with access to banking services under federal prohibition.
Industry remains disappointed with lack of progress made on cannabis banking under the previous administration.
A Senate source told MEDCAN24 in December that Republican House and Senate leadership “openly and solely blocked” then-Senate Majority Leader Chuck Schumer’s (D-NY) attempt to include the bill in a government funding bill as the session came to a close.
Warren and Sen. Tommy Tuberville (R-AL) had challenged the idea that there was enough GOP support for the SAFER Banking Act to pass on the Senate floor during the lame duck session.
Warren accused certain Republican members of overstating support for the legislation within their caucus, while also taking a hit at Trump for doing “nothing” on cannabis reform during his time in office as he makes a policy pivot ahead of the election by coming out in support of the marijuana banking bill and federal rescheduling.
In an interview with MEDCAN24, Sen. John Hickenlooper said that he believes the lack of Republican support is the biggest obstacle to passing the cannabis banking bill. And he said if Trump is serious about seeing the reform he recently endorsed enacted, he needs to “bring us some Republican senators.”
Prior to becoming House speaker, Rep. Mike Johnson (R-LA) consistently opposed cannabis reform, including on incremental issues like cannabis banking and making it easier to conduct scientific research on the plant.
Meanwhile, on the one-year anniversary of a Senate committee’s passage of the SAFER Banking Act in September, the Congressional Budget Office (CBO) released an analysis on the economic impact of the reform, including the likely increase in federally insured deposits from cannabis businesses by billions of dollars once banks receive protections for servicing the industry.
Separately, the CEO of the financial giant JPMorgan Chase said recently that the company “probably would” start providing banking services to marijuana businesses if federal law changed to permit it.
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