“In short, the sky is not falling in Colorado.”

That is how Republican Sen. Cory Gardner summed up his testimony to the Senate Banking Committee on Tuesday morning, where he was advocating legislative action to give legal marijuana businesses access to banks and protection for banks from being viewed as money launderers under federal law for handling their money.

Gardner and Oregon Democratic Sen. Jeff Merkley appeared at the witness table on a day that lawmakers from both parties were highlighting cannabis legislation, an issue that is only going to have more and more resonance going into 2020.

Gardner, who faces a potentially tough reelection in 2020, said it was high time “the federal government wakes up to the reality that the cannabis issue is not going to go away, and we must have action.”

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He had been an opponent of the effort to legalize marijuana in Colorado, but with state voters having spoken through a referendum, he has since worked to build regulatory structures, including access to banks. His home-state colleague, Democrat Michael Bennet, is a 2020 presidential contender and has worked with Gardner on normalizing the issue as well. 

The hearing about the financial regulatory issues involving what are legal cannabis businesses at the state level, but illegal federally, coincided with the introduction of other legislation by Democrats on both sides of Capitol Hill.

Candidates weigh in

In once such case, California Democratic Sen. Kamala Harris, a 2020 White House hopeful, teamed up with House Judiciary Chairman Jerrold Nadler, D-N.Y., on a bicameral measure that would decriminalize marijuana and expunge past offenses, except in cases dealing with distribution to minors. The legislation is likely to serve as a key marker heading into next year’s elections. 

“Despite the legalization of marijuana in states across the country, those with criminal convictions for marijuana still face second class citizenship. Their vote, access to education, employment, and housing are all negatively impacted,”  Nadler said in a statement. “Racially motivated enforcement of marijuana laws has disproportionally impacted communities of color.”

Among the 2020 Demoratic presidential candidates, New Jersey Sen. Cory Booker is also an original co-sponsor, as is Hawaii Rep. Tulsi Gabbard.

Merkley and fellow Oregon Democrat Ron Wyden also signed on from the Senate, and the support of conservative GOP Rep. Matt Gaetz of Florida has made the effort bipartisan.

The legislation from Harris and Nadler, it turned out, would not be the only cannabis legislation to be rolled out on Tuesday. New Jersey Democratic Sen. Robert Menendez announced the introduction of a measure with Kentucky Republican Sen. Rand Paul and North Dakota Republican Sen. Kevin Cramer, again along with Merkley, that would ensure legal marijuana businesses have access to insurance products.

“Federal law should not prohibit access to insurance for employees of local businesses these states voted to support, nor should it prohibit employers from acquiring insurance that protects their stores,” Cramer said in a statement. “This legislation takes a federalist approach by opening the insurance market to compliant businesses and preventing federal law from hindering employees’ market access.”

New Jersey Gov. Phil Murphy, a Democrat, was among those offering statements of endorsement for the legislation, citing a recently enacted medical marijuana law in the Garden State.

“It is our responsibility to make sure that businesses associated with this life-changing medical treatment are treated similarly to other medical services providers. I thank Sen. Menendez for introducing legislation that will protect the access of these businesses to insurance,” Murphy said. “We must do everything in our power to ensure patients have access to treatment.”

The same four senators worked on one of the cannabis banking proposals that was being discussed Tuesday morning.

Cash in shoeboxes

While there is no immediate timeline for action, senators and outside experts who work with the cannabis sector said that especially when it comes to the financial system, the current system requiring the use of large amounts of cash is not workable.

In exchanges with Democratic Sens. Catherine Cortez Masto of Nevada and Brian Schatz of Hawaii, Rachel Pross, the chief risk officer for Maps Credit Union in Salem, Ore., underscored some of the challenges. The credit union handles accounts for cannabis businesses that are legally operating under Oregon law.

“We have talked to numerous members who have opened accounts at Maps who have described that they had been storing cash in shoe boxes, empty mattresses,” Pross said.“There are unscrupulous third-party players involved in this who are selling cash vaulting type of services, and those are not true cash vaults. They are in fact storage units, just basic storage units, full of cash that are earmarked for various businesses.”

Pross was among those in attendance Tuesday to point to the extent to which the marijuana businesses have become intertwined in the remainder of the economy.

“It’s impossible to draw a clear line between what is cannabis-related and what is natural commerce that has nothing to do with cannabis,” Pross said. “Not only does Walmart accept money from employees of cannabis businesses in states where it’s legal, but Walmart very likely sells basic business supplies to legal cannabis entities.”

Earlier in the hearing, Merkley talked about a trip to Salem with a cannabis operator who was trying to pay state taxes in cash.

“He had his quarterly payment of $70,000 in a backpack. He turned it over on a table and it just kind of spread out across the whole table and some of it fell on the floor,” Merkley said.

“It’s the states that are leading on this issue, and the federal government has failed to respond,” Gardner said. “It has closed its eyes and plugged its ears and pretended and hoped that the issue will just go away, but it won’t.”