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SAFE Banking Act introduced again, aiming to give Colorado cannabis businesses access to banks, credit cards

Fractured Congress hasn't been able to agree on even relatively modest reforms
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Posted at 1:59 PM, May 01, 2023

Colorado cannabis entities are forced to conduct business mostly in cash, leaving them vulnerable to robberies. But a bill recently reintroduced in Congress would change that.

Anyone would be hard-pressed to find any business on South Broadway in Denver more regulated than the marijuana shops.

"We cannot let anybody in the door without checking their ID. I could go down to [a liquor store] and buy 40 cases of beer if I was so inclined, but we have strict limits on what we can sell to patients and customers here in the store," explains Clif Gordon, manager of the family-owned business, Herban Underground.

It's the same story at Peak Dispensary three blocks north.

"We have set back requirements, distance requirements from schools, daycares and even each other. We've got lock requirements for our doors, storage requirements, audits, inspections, and multiple agencies to adhere to," said Justin Henderson, owner of Peak.

Both owners said they are happy to follow every regulation to be able to stay in business, but there is one rule they hope will change soon, operating as a cash-only business.

With marijuana still illegal on the federal level, national banks and major credit card companies don't want to touch pot money over a fear of federal prosecution. Over the years it's created a major safety concern.

"A lot of businesses that don't have banking abilities are stuck with a lot of cash on site," said Gordon, who explained his business has been able to work with Colorado-based banks and credit unions to offer a more safe option. "If we could take credit cards, I would guess that 70% to 80% of my business would be transacted electronically. We wouldn't have that cash, we wouldn't be at risk, because the money's just not there."

SAFE Banking Act introduced again, aiming to give cannabis businesses access to banks, credit cards

"We've had multiple attempted break-ins and we've had multiple robberies. I'm not alone. I've seen a lot of other dispensaries going through the exact same thing," said Henderson.

Even large companies aren't immune to being a target for criminals.

Eaze medical cannabis delivery company also owns Green Dragon which is one of the largest dispensary chains in Colorado.

"We have 59 retail locations across the U.S. We take a mix of debit cards, as well as ACH for our delivery business. So we are not purely cash only, but what I would say is, we still have a substantial amount of cash throughout our business. We employ about 1,300 retail and delivery employees across the U.S. The use of cash significantly increases the risk to those employees," said Eaze CEO, Cory Azzalino.

He explains the company's size and scale allow them to have relationships with payment processors and banks that allow debit card use.

He said they deal with at least one robbery a month across their dispensaries and reducing the amount of cash on-site would be a help to public safety.

A group of bipartisan lawmakers including both Senators from Colorado have introduced the Secure and Fair Enforcement (SAFE) Banking Act.

“Colorado’s cannabis industry is American innovation at its best, but operating in all-cash is stifling its potential and making small businesses a target for crime,” said Senator John Hickenlooper (D) in a statement. “It’s time for the federal government to catch up to Colorado.”

The legislation, if passed, would allow legally operating cannabis businesses access to banking services and credit card services without either party facing federal punishment.

"We're legitimate businesses. We pay our employees. We pay our state and we pay our federal taxes. We follow every regulation and I guarantee you, there is no business in Colorado more regulated than the cannabis industry. We do that. All we're asking for is not only to make it safer for our staff, and our store, but make it easier and safer for our customers," said Gordon.

Different versions of the SAFE Banking Act have passed the House six times. However, it has not once been taken up in the Senate.

"Where it becomes more hotly contested is when there are other social equity elements added to the bill. Although they have good intentions, the actual impact of that is that you start to lose Republicans and potentially even some Democrats, which means that it just becomes less viable to actually pass. Because this is such an important issue for small businesses, and just general public safety, I think that really needs to be the focus," said Azzalino.