ALTA Says Compliance Clarity Needed for Businesses Providing Services to Cannabis Industry

July 23, 2019

The Senate Committee on Banking, Housing, and Urban Affairs held a hearing July 23 titled "Challenges for Cannabis and Banking: Outside Perspectives." This was the committee's first foray into the topic.

Witnesses included Sens. Cory Gardner (R-Colo.) and Jeff Merkley (D-Ore.) and representatives from the banking and marijuana industries. The hearing discussed S.1200, the Secure And Fair Enforcement Banking Act of 2019 (SAFE Act). This legislation provides a legal safe harbor for financial institutions doing business with state-legal marijuana businesses. The SAFE Act prevents federal regulators from taking enforcement actions against financial institutions that do business with the cannabis industry in states where it is legal. The goal of the bill is to move those businesses away from cash and into the banking system. It has broad support of the financial services industry.

The hearing was held a day after U.S. Sen. Robert Menendez introduced legislation to allow cannabis businesses to get property, casualty and title insurance.

ALTA issued the following statement on the need to clarify compliance for businesses that provide services to the growing cannabis industry.

“Senator Robert Menendez’s insurance bill—along with the SAFE Banking Act—provide some needed relief to the tension between federal and state laws regarding the legality of cannabis,” said Diane Tomb, ALTA’s chief executive officer. “However, more needs to be done to make sure legitimate businesses like title and escrow companies are not violating the law when providing services to this burgeoning industry when real estate is purchased. ALTA members support efforts to clarify compliance under state and federal laws for businesses that facilitate transfer and sale of real estate that could be used in growing, storing or selling of marijuana.”

In March, the House Financial Services Committee voted 45-15 to advance the SAFE Banking Act (HR 1595). ALTA is working with several other insurance related groups to expand the provisions of the Senate bill to protect insurance companies. During the House mark-up, a similar provision protecting insurance companies was added.


Contact ALTA at 202-296-3671 or communications@alta.org.

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