Today, staff from Smart Approaches to Marijuana (SAM), the largest national policy group opposed to marijuana commercialization founded by former Congressman Patrick Kennedy and White House advisor Dr. Kevin Sabet, testified in opposition to the SAFE Banking Act at a hearing held by the US Senate Committee on Banking, Housing, and Urban Affairs.
During the testimony, SAM staff called senators’ attention to a new video showing multiple pot shops in Denver accepting card payments, directly countering Big Marijuana’s claims that the industry is a cash-only operation. Additionally, the testimony made reference to a new letter by Carter, Reagan, Clinton, Obama, and Bush Drug Enforcement Administration administrators and drug control policy office directors.
“In essence, the SAFE Banking Act is putting the proverbial cart before the horse” said Garth Van Meter, Vice President of Government Affairs for SAM. “The SAFE Banking Act will allow the expansion of an industry pushing new, exponentially more powerful forms of marijuana before any of its health or other societal impacts are fully understood.”
“This isn’t about cash or credit, despite what today’s multimillion-dollar K- street pot lobbying machine tells us,” said Dr. Kevin Sabet, president and founder of SAM. “In reality, undercover video from dispensaries in Colorado exposes the fact the industry takes plastic. They are even openly promoting this on Weedmaps, an online industry advertiser.”
Under the Money Laundering Control Act of 1986 (“MLCA”), banks are prohibited from providing financial services to businesses that are engaged in illicit activities. These provisions are enforced, in part, through the Bank Secrecy Act (“BSA”). While the SAFE Banking Act claims to provide a safe harbor under the MLCA and BSA to banks serving the marijuana industry, it will have no practical effect as the use, possession and distribution of marijuana remains illegal at the federal level under the Controlled Substances Act, which preempts all state laws intended to govern the marijuana industry.
This legislation additionally has the capability to introduce existing criminal elements into the banking system. Contrary to the promises of legalization supporters, the black market hasn’t gone away in legalized states. Many unlicensed operators have store-fronts, delivery services, and even pay for internet advertising. It is not far-fetched to believe they would also apply for bank accounts if given the opportunity. On this front, four former DEA administrators and six former White House Drug Czars submitted a joint letter urging Congress to reject the SAFE Banking Act for the potential it has to expose the U.S. financial system to crime.
“Make no mistake, this bill is a backdoor attempt at the legalization of marijuana at the federal level,” continued Dr. Sabet. “At the state level, the track record for marijuana legalization and commercialization has been far from stellar. States have experienced increased drugged driving deaths, thriving black markets, super potent products in kid-friendly packaging, and rising mental health concerns. It took over a hundred years to reverse the public health impacts of the tobacco industry, we have an opportunity now to not repeat those mistakes with Big Marijuana.”