Senate Committee Passes Bill Permitting Marijuana Industry Employers to Sponsor Retirement Plans

Senate legislation that would permit employers in the cannabis industry to sponsor retirement plans passed the Senate Banking, Housing and Urban Affairs Committee on Wednesday by a vote of 14-9.

Senator Bob Menendez, R-New Jersey, was absent from the vote, but Senator Sherrod Brown, D-Ohio, voted yes by proxy on his behalf.

The SAFER Banking Act is intended to allow cannabis firms access to federal banking and financial services, including providing employer-sponsored retirement accounts, if the business is operating legally in its state, despite marijuana being a federally banned substance. The bill next heads to the Senate floor, which has not yet scheduled a vote on it.

Paul Richman, chief government and political affairs officer at the Insured Retirement Institute, says by email that If enacted into law, “this legislation will provide the much-needed clarification for retirement plan providers and employers that eliminates the legal uncertainty in federal law to allow employers to offer a retirement plan to their employees without risking violations of the anti-money laundering laws, despite the business being legal under state law.” 

Under current law, banks risk “running afoul of provisions contained in the Bank Secrecy Act, and federal anti-money laundering laws have left many financial institutions unwilling to provide their services to this industry, including the offering of retirement savings plans as a benefit to the employees,” Richman added, in a statement. 

While most of the nine senators who voted against the bill were Republicans, some Republicans, such as Senator Cynthia Lummis, R-Wyoming, voted to advance the legislation. She argued that although she does not favor marijuana legalization in Wyoming, the bordering states of Colorado and Montana should not have their businesses discriminated against by being unable to access banking.

Senator Steve Daines, R-Montana, who also opposes legalizing marijuana, said the act should be passed because of the risk an all-cash business puts on marijuana firms. “An all-cash model makes them targets for theft, tax evasion and organized crime,” said Daines, who also voted to advance the legislation.

Representative Patrick McHenry, R-North Carolina, ]chair of the House Committee on Financial Services, said in December that he opposed the SAFER Banking Act but would not oppose it if the party as a whole wanted it passed, according to reporting from The Hill.

Even if most Republicans oppose the legislation, the party’s nine-seat majority in the House might not be enough to block it if some House Republicans vote for it, as some Senate Republicans have already done.