About Those Benjamins | The Source Weekly - Bend, Oregon

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About Those Benjamins

SAFE Banking Act could help decrease crime



As a one-time partner at a law firm representing cannabis and hemp entrepreneurs, I faced many of the same challenges as my clients. In other law firms, you bill a client monthly, draw from that client's trust account to cover your expenses and send an invoice to your client.

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Not so when you're representing weed farmers. In the summer of 2017 (around 72 hours before the total solar eclipse swept across Central Oregon) I traveled three and a half hours to Medford to meet up with a client at a freeway-adjacent gas station. There, the client handed me a burlap shopping bag full of $30,000 cash.

Having neither been a part of a bank heist nor the release of a billionaire's kidnapped child, this was the most amount of cash I had ever seen at one time. It was certainly the greatest amount of cash I had ever personally been responsible for. For two days and nights, I was one fiery car wreck or vehicle break-in away from bankrupting our law firm, or at minimum, delaying paychecks and payments to vendors.

After the pickup, I drove about 120 miles from Medford to Eugene (in solar-eclipse freeway traffic) to pick up my 5-year-old son from his grandparents, and then drove another 120 miles over the Santiam Pass to Bend. I did all of this with enough cash to pay off most of my student loans stored next to my spare tire and jack in the back of my Toyota 4Runner.

For me, that was a rather nerve-wracking one-off. For cannabis entrepreneurs, that's a weekly, or daily, experience. Marijuana continues to be classified by the federal government as among the most dangerous drugs in America; scheduled right alongside ecstasy and heroin, considered worse than fentanyl.

Accordingly, banks that accept cash from marijuana farmers, processors or dispensaries could face money-laundering investigations, and lose their certification with the Federal Deposit Insurance Corporation. While a select few credit unions in some anti-prohibition states will bank money from cannabis companies for a stiff monthly fee (usually starting at $500), they also frequently go months without accepting new clients. This is a problem for a cash-heavy industry.

All of that could change, however, if the Secure and Fair Enforcement Banking Act is eventually signed into law. Co-sponsored by over 100 members of Congress, the SAFE Act is the most widely sponsored pro-marijuana bill to get into a House committee. Rep. Maxine Waters (D-CA), chair of the House Financial Services Committee, scheduled the Act for markup March 26. If passed, it would allow banks in legal states to accept deposits from marijuana businesses operating within the legislative framework of their state's rules. While a Democratic majority in the House made this possible, the bill still faces long odds of being considered in the Republican-controlled Senate. Senate Majority Leader Mitch McConnell (R-KY), a supporter of legal hemp, has been steadfastly anti-marijuana.

If passed, it would be a game-changer. First, it would eliminate the sweaty-palmed fear faced by business owners who need to move a small fortune of Benjamins to Salem to pay state taxes. (Ironically, Oregon can legally accept marijuana tax money and bank it with U.S. Bank.) Second, it would reduce the risk of commingling unregulated-market funds with "legal" cash, allowing auditors to track its origins. (Still more irony: The banking prohibitions have exacerbated the effect of money laundering in the cannabis industry, accomplishing the very opposite of the federal government's intent with this prohibition.)

Finally, allowing a company to bank cash would allow consumers to pay with credit cards, and decrease the risk of robberies at dispensaries. That "criminal element" sparking fear among countless citizens who live nearby cannabis farms and dispensaries is largely a result of the stringent laws of which those same citizens approve.

Right now, anyone who tries to rob a licensed cannabis farm, processor or dispensary in Oregon is basically asking for a lengthy prison sentence. Each Oregon Liquor Control Commission licensee must have commercial locks on all doors, and a state-of-the-art security system, including high-definition cameras that monitor every square inch of a licensed cannabis premises. As such, robbery attempts are rare, and successful robberies are unheard of. Still, the lure of tens of thousands in cold, hard cash stored within a dispensary will be ever-present until marijuana companies can operate like nearly every other business in the nation and bank their earnings.

It may also get a few sweaty-palmed cannabis lawyers off of the road.

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