Alaska’s U.S. senators join push to protect banks serving cannabis businesses

WASHINGTON — Alaska’s two Republican senators are part of a group of federal lawmakers seeking to protect banks that serve the marijuana industry from federal penalties — an effort that has repeatedly flamed out in the face of GOP opposition and Democratic efforts to broaden the measure.

The SAFE Banking Act would shield banks that serve legitimate cannabis businesses from federal penalties in states that have legalized marijuana, including Alaska.

Because they lack banking access, most cannabis businesses here conduct transactions in cash. Supporters of the legislation say that leaves them vulnerable to robberies and violent crime and creates burdens for the marijuana industry, the state and consumers.

The SAFE — or Secure and Fair Enforcement — Banking Act, originally proposed in 2013 and introduced again several times since then, was reintroduced in the Senate last week by Democratic Sen. Jeff Merkley of Oregon and Republican Sen. Steve Daines of Montana. Democratic Rep. Earl Blumenauer of Oregon and Republican Rep. Dave Joyce of Ohio introduced the bill in the House of Representatives.

Forty senators including Alaska Republican Sens. Dan Sullivan and Lisa Murkowski, along with five other Republicans, have signed onto the bill. Alaska Democratic Rep. Mary Peltola did not originally co-sponsor the House’s companion legislation this term, but on Thursday her office said she plans to join the legislation.

The U.S. Drug Enforcement Agency currently lists cannabis as a Schedule I drug, opening banks to federal penalties if they do business with the marijuana industry.

Currently, most Alaska cannabis businesses must deliver their state marijuana taxes to a drop box in Anchorage in cash every month — meaning some Alaska marijuana businesses are “driving or flying thousands of dollars,” according to attorney Jana Weltzin of JDW Counsel, which works with the marijuana industry.

In 2022, the state of Alaska collected more than $28 million in marijuana taxes, according to a state Department of Revenue report.

“There’s a lot of cash on hand, especially off the road system in really isolated areas where they really are left to fend for themselves, and it’s very difficult,” Weltzin said.

[Curious Alaska: Where does the money from marijuana taxes go?]

While Sullivan was first running for Senate in 2014, he opposed the state’s marijuana referendum, which was on the ballot at the same time. However, 52% of Alaskans voted to legalize marijuana, and Sullivan acknowledges that “the people have spoken.”

With marijuana legalized in Alaska, Sullivan said he worries that cannabis businesses having so much cash on hand makes them a target for crime. Last term, he was involved in bipartisan talks with Senate leadership to advance the legislation.

“To me, that is the overriding issue: safety,” Sullivan said in an interview this week. “And I think that’s really hard to argue against.”

Murkowski said the lack of SAFE banking protections creates a “hindrance to safety.”

“It’s something that we have struggled with since the state legalized marijuana and we began collecting taxes,” she said this week. “So this is something that I believe we’ve got to address for all the right reasons.”

Peltola’s office, in a statement Thursday, echoed similar concerns about “unnecessary barriers to legitimate business activities” and safety risks.

“It is time to responsibly integrate this growing industry into our economy,” the statement said.

Though Alaska’s marijuana industry is enthusiastic about SAFE banking, Weltzin said she isn’t getting her hopes up just yet. The House has passed SAFE banking legislation seven times, but the measure has repeatedly stalled in the Senate, facing key Republican opposition including from Minority Leader Mitch McConnell. Some Democratic leaders have also advocated for expanding the bill to include expungements for marijuana convictions, which has delayed progress.

“It’s kinda like I kept getting ready for Christmas, and then like Christmas not happening over and over again,” Weltzin said.

Sullivan said he sees Republican opposition to SAFE banking shrinking. When more states legalize marijuana, he said, “those senators get quickly interested.”

He said that a states’ rights argument has also been compelling to Republican senators who support the 10th Amendment, which confers rights not explicitly granted to the federal government in the constitution.

“There’s another group of senators who are really strong believers, like me, in the 10th Amendment,” Sullivan said. “And you’re starting to see those Republican senators say, ‘Hey, my state hasn’t done this but I really believe in states’ rights and states’ ability to go out on their own in certain areas.’”

[New report on pot in Alaska says industry may be hitting its ceiling]

Murkowski said that as more states legalize marijuana, she expects broader political consensus on SAFE banking.

“Right now, we haven’t been able to make the political headway that we need on this issue, but I think as you’re seeing more states that have moved to legalize marijuana and the cannabis industry, I think you’re seeing more support,” she said.

Sullivan said that the legislation made progress last year but he isn’t sure where the legislation will go this term. He hopes Congress takes action soon.

“When this place works the best, it’s when you can preempt a problem, envision it and say, ‘That’s gonna be a problem some day, let’s fix it before it gets initiated by a tragedy.’ ”

The SAFE Banking Act is expected to receive a hearing in the Senate Banking Committee before the end of the month.