Cannabis Legal Report – October 2022 #3 | Coie Perkins
[Co-Author: Hanna Barker Mullin]
Cannabis: in brief
- Cannabis banking reform possible during Lame-Duck session
- Nevada court removes cannabis from state’s controlled substances list
Cannabis banking reform possible during Lame-Duck session
The SAFE Banking Act has passed the House in one form or another seven times, only to stall in the Senate, but some hope recent positive momentum in the cannabis industry could lead to the passage of a banking reform in the next session of Congress after the midterm elections. .
Senate Majority Leader Chuck Schumer (D-NY) said Congress is moving toward introducing and passing a long-awaited bipartisan SAFE Banking Plus package, which merges restorative justice components with protections for financial institutions that work with regulated cannabis companies.
As we noted earlier, the SAFE Banking Act would allow financial institutions to support the cannabis industry by eliminating two major risks of adverse government action. The bill explicitly allows financial institutions to do business with cannabis companies and prohibits the government from terminating or limiting a financial institution’s deposit or stock insurance solely because the institution is doing business with a company. of cannabis. In addition, the bill would provide protections to other financial service providers, such as payment processors, from liability solely because of their activities in providing services to legitimate cannabis businesses and investing revenues earned. of these services. Currently, federal cannabis restrictions have only prompted a limited number of financial institutions to take the risk of providing banking services to cannabis companies. And those that charge exorbitant fees and costs that prevent many from accessing services, primarily affecting smaller and diversity-owned entities. As a result, the economic development of cannabis businesses, and especially small, diversity-owned entities, has been hampered by reduced liquidity, increased barriers to entry, and heightened security concerns for some businesses forced to rely on cash transactions.
Many stakeholders have announced their support for SAFE Banking. A recent poll conducted by the American Bankers Association showed that two out of three Americans would like Congress to pass a bill that would allow legal cannabis businesses access to traditional banking services. The NAACP also recently announced its support for SAFE Banking. Earlier this year, the Conference of State Banking Supervisors released open letters to the House and Senate calling for the SAFE Banking Act not only to be retained, but also expanded. Coalitions of state governors, attorneys general and treasurers have previously announced their support for SAFE Banking protections (here, here and here).
Nevada court removes cannabis from state’s controlled substances list
On October 26, 2022, a Nevada state court ordered that cannabis be removed from Schedule I of Nevada’s Uniform Substances Act. As we previously reported, the court ruled in September that the Nevada Board of Pharmacy’s classification of cannabis as a Schedule I substance violated the state constitution, but reserved its decision on the matter. whether the Board of Pharmacy had the power to regulate cannabis – until last week, when the court found that the Commission had no such power.
After Nevadans voted twice to legalize cannabis (first for medical use in 1998, then for adult use in 2016), the state constitution was amended to recognize that cannabis has a medical use, but the Board of Pharmacy has not changed the state designation. cannabis as a Schedule I substance, which is reserved for substances that have no medical benefit and pose a high risk of abuse.