Crapo: Time for cannabis and banking harmony
One of the most important cannabis opponents in the U.S. Senate also happened to be one of the few voices to move the needle Tuesday toward normalizing relations between the cannabis industry and banks.
Sen. Mike Crapo, a Republican who chairs the Senate Banking, Housing and Urban Affairs Committee, heard testimony Tuesday in support of loosening regulations that restrict banks from doing business with marijuana-related companies in states that have legalized it.
Crapo called for testimony Tuesday to support the Department of Justice’s move to end Operation Choke Point, an Obama-administration initiative to investigate the relationship between banks and businesses deemed legal but at higher risk for fraud and money laundering, including not just cannabis purveyors but also gun dealers, pawn shops and payday lenders.
“Operation Choke Point was deeply concerning to me because law-abiding businesses were targeted strictly for operating in an industry [that] some in the government disfavor,” Crapo said.
Back to Nixon era
Crapo equated Operation Choke Point to contemporary banking regulations that prohibit lenders from profiting from unlawful endeavors. Under the Nixon-era Controlled Substances Act, marijuana is classifed as a “Schedule One” drug, which means it has no known medical uses and a high potential for abuse. The Controlled Substances Act means cannabis is illegal under federal law, even though some states have legalized or decriminalized it.
Idaho is one of a handful of states that still prohibits all forms of cannabis. It’s one of 17 states that prohibit either medical or recreational use of the drug.
Tuesday’s hearing follows a bill introduced and passed by the House of Representatives on June 5 and sent to the Senate for review. The Secure and Fair Enforcement banking bill would, among other things, prohibit federal regulators from restricting banks as they engage with otherwise legal businesses in cannabis-friendly states.
The hearing comes on the heels of a July 17 story in Rolling Stone that highlighted Crapo as a Republican who holds the keys to the cannabis kingdom. As chairman of the Senate Banking Committee, he largely decides what bank-related legislation can move to the Senate floor. Crapo generally has opposed legalization in one form or another, though he has gone on the record to support a state’s right to allow medical marijuana.
“You gotta be consistent,” Crapo’s press secretary, Melanie Baucom, told The Press after the hearing. “The senator remains firmly against marijuana legalization, but he was also a big advocate to keep the Obama Administration from trying to squeeze banks from working with legal businesses.”
Idaho ballot quest
The hearing in Washington took place at the same time an Idaho group is seeking to ask voters to legalize medicinal marijuana on this November’s ballot. The Idaho Cannabis Coalition has submitted signatures for ballot approval and hopes to hear back from the state on or before July 30.
“It’s stupid what [Congress hasn’t] done for the industry yet,” Idaho Cannabis Coalition organizer Bill Esbensen said. “These banking regulations make it so legitimate businesses have to keep dealing in cash-only. That’s a terrible way and, frankly, a risky way to do business.”
Esbensen said he’s always been surprised at Idaho’s historic government resistance to legalize cannabis.
“Idaho’s a huge Libertarian state,” he said. “We believe in freedom. I should be able to ingest cannabis — especially for medical use — without fear of prosecution.”
He added that prohibiting medical marijuana leads to risks far more dangerous to people than to banks, citing how parents endanger their safety to participate in illegal drug purchases to get the medicine they need.
“We have moms and grandmas who are risking their freedom to help members of their families, and that’s not right,” Esbensen said. “It’s just not right.”
“This is a very important and complex issue,” Crapo said to conclude Tuesday’s hearing, “that we need to get right.”