Witnesses. Today the committee will hear from witnesses about the challenges that state stanksed businesses in the cannabis owners have when attempting to under the controlled substance act, its considered a schedule one drug. Being categorized as a schedule one means that the possession, distribution or sale of marijuana or other marijuana derived products is illegal under federal law and any proceeds from cannabis related activities remain subject to antiMoney Laundering laws. In the last several years many states have used valid initiatives or referendums that have legalized marijuana in some form, whether for recreational or medical use. Currently there are 11 states plus the district of columbia where it is legal to buy and consume recreational and medical marijuana adds well. And there are 22 states plus d. C. That have approvedmedcal marijuana totaling 33 states in all that have some form of Legal Marijuana. Senators gardner and merkley have introduced Bipartisan Legislation that have attemptedled to ease from the status and more lenient. I spoke many times and appreciate the hard work that each senator has done on this legislation and look forward hearing from each of you. Our second panel will highlight challenges that institutions face in banking different parts of the Marijuana Industry. How marijuana related businesses operate, and the complications they have that they have faced in accessing Financial Services. And finally how the safe banking act would work. We will also hear concerns over advocates pushing to legalize marijuana, the effects of safe banking act in light of marijuana continuing to be illegal under federal law, and health harms and additii,s thate can lead to. I look forward to looking more at this. What the come plooipts challenges could be, and the challenges presented when banking legacy cash, specifically ensuring that the legacy cash compliance with the fin sen guidance. Having a conversation about whether banks should be able to provide banking soichkszs to those engaged in federally illegal behavior but legal in some states brings up an issue and a concern of mine that has been a big push where weve seen a big push to choke off Legal Industries from the banking sector. I said many times and i will say it again, operation choke point was deeply concerning to me because law abiding businesses were targeted strictly for operating an industry that some in the law disfavored. Many banks have stopped providing help. This takes the guys of regulatory and enforcement scrutiny. Choke poircht was inappropriate and Congress Needs to prevent future operation choke point initiatives. Senator brown. I thank you. Senators merkley and gardner, welcome into the second panel also. Over the past several years voters and legislatures in nearly every state have to some degree legalized or decriminalized cannabis. In ohio its legal. The Legal Cannabis industry is one of the Fastest Growing in the united states. It ploys hundreds of thousands of people many of whom are represented by unions like the united food and commercial workers international. These americans work hard to support themselves and their families just like workers in any other industry. They deserve the same rights and pro eks it is why et in states like ohio they find it difficult to acsets the Banking System. That puts them and the americans they do bids with at risk. No matter how you feel about marijuana itself, we have a duty to look out for the workers who work in this industry and for the communities they represent. Without access to the Banking SystemLegal Cannabis businesses are force the to operate in the shadows dealing in large amounts of cash, puts a robbery target on the backs of workers, creates a safety hazard for communities, make it harder to monitor transactions. Getting paid in cash makes it difficult to get a credit card, prove income, get a loan, keep your personal bank account. That can force workers to turn to shady outfits like payday lenders and Check Cashing places that charge high fees, trap people in debt and make low income people poorer. Companies or workers that have found a bank often pay high fees and are limited to only the most basic Financial Services. This doesnt just affect the cannabis industry. It affects people you might not think of, plumbers, welders, electricians, Service Retail locations and other facilities, lawn care and gardening Companies Like scots miracle grow in ohio sell materials and equipment, all these businesses want to serve their customers and support their workers but dont want to lose their longstanding banking interests. Community banks in ohio and other states want to serve the Cannabis Industries in these communities. When i recently met with members of the Community Bankers association of ohio and the Credit League earlier this year nearly every hand shot up when i asked if this affected them. We know it comes with legal and superrizery risks because of the tension between federal and state lauds. It requires extra layers of Due Diligence channeling approximately banks and Credit Unions play a key role in monitoring illegal activities. Its critical remain taken antiMoney Laundering framework and access to the banking is essential. We cant continue to ignore this industry and the thousands of workers and communities it affects. We know that todays hearing is just one piece of the Conversation Congress must have on marijuana policy. People should not be thrown in jail or have their futures jeopardized by a criminal record over nonviolent offenses. People should not be thrown in jail or have their futures be jeopardized. Everyone should have access to the medicine they need to care for themselves and their families. Im looking forward to hearing the pro speck tives of all of our members. As i mentioned previously we have two witness panels today. Panel one testimony from cory gardner of colorado and the honorable senator jeff merkley of oregon. On panel two we receive testimony from miss rachel pras who is the chief officer of Maps Credit Union, miss joann sherwin, president and ceo of citi wide, mr. Garth van meeter, smart approaches to marijuana or sam, and mr. John lord, ceo of live well enlightend health. Senators gardner and merkley, you may proceed with your statement. Thank you, chairman and mr. Brown as well. This is a difficult hearing. Difficult topic. I know that but we were sent here to deal with difficult topics and i am grateful for the opportunity to talk about this today. Its an important step forward first hearing weve had on this issue as a federal government wakes up to the reality that the cannabis issue is not going to go away. And we must have action. Theres been a tram act shift in the views of cannabis in recent years. Polling shows 65 of americans support legalization of marijuana. 93 of the American Public support medical marijuana. In fact majorities of both parties support legalization. In a time when all the talk is about how divided we are, we are worry markably united on this issue. Given that support it shouldnt be surprising that the vast majority of states have changes their laws. 47 states now allow some. Idaho, nebraska and south dakota do not. That represents more than 95 of our population living in a state with laws allowing some form of cannabis. 33 states have legalized medical, 11 regulated adult use. Its happening in the bluest of blue and the reddest of red and in colorado the purpose left of purple. Its happening in oregon, massachusetts and, and colorado and alaska and maine, north dakota, pennsylvania and ohio, last year alone, michigan, missouri, oklahoma, oouchlt and vermont all adopted or ects panned marijuana programs. In short the states that are leading. And the federal government has failed to respond. It has closed its eyes and plugged its ears and pretended the issue will go away. It wont. The disconnect has become both intolerable and untenable. The drammatically ects paneled cannabis industry presents challenges for our nation. Ive been a skeptic about the legalizationp i opposed it in colorado. I was concerned about the effects on the youth and Public Safety. I was leery of breaking with the dpral government, i was uneasy about adding at toxicant. I dont encourage my children to use it. Several years into legalization in colorado i can say the sky has not fallen. There are challenges to be sure. Colorado has seen an increase in transient populations. There are concerns about trafficking and hospitalizations. Cannabis has been illegallitracted. But according to a pediatrics report youth use is 10 lower in legalized states. One strong theory is that legal dispensaries both force out illegal sellers and enforce age limits. Youth have less access. The data on crime are mixed. Marijuana owe foernss are down. Colorado has increased Violent Crime but thats likely driven by drandsient populations. At the same time the state has brought in over 1 billion. The state veefbde received more than 266 million last year. The sky is not falling in colorado. What makes the Current Situation intolerable is the disconnect between federal and state law. Every sing the state Legal Cannabis transaction is federally illegal. The dollars involved are the proceeds unlawful. That means that all of the different parts of our economy that connect to any legit plat business, plumbers, lec trixs, landlords, ets et cetera et cetera, risk becoming federal criminals. That also means that the 1. 5 billion industry a year in colorado is nearly all cash. Bafrpgds will not accept industry money for fear of regulatory action or federal forfeiture. Keeping that out of banks means we lose the ability to trace. Its harder to ensure all taxes are being paid. It makes it easier for criminals to pose as legitimate. And it leaves hundreds of millions of dollars in cash in the state. For example the state department of revenue has one location that accepts cash, just one. Business owners in the western part often have to drive five or more hours with tens of thousands of dollars in cash just to pay their taxes. It 80s a genuine Public Safety problem. In 2016 a former marine was shot and killed while on duty as a Security Guard at a dispensary. We are making it hard to comply with the law. A partner at a law firm told me the banks accounts were going to be shut down because they counsel state Legal Cannabis. For them lack of banking means when they take in a Million Dollars bond for a cannabis person, it takes days to count the cash. It requires extra Security Guards in their offices. All of this is scratching the surface of the Financial Services. I havent mentioned the problems with veterans or epa refusing to certify or the fdas strug lds or the confusion created for Law Enforcement or any of the other problems that contribute to this intolerable situation. Congress simply must act. Our failure to act seems to be grounded in two incorrect asimss. That we can continue prohibition. We ever a government of the people and the people have changed their views. So our laws must change. The second is we can come to a national consensus. We cant. There are still too many unanswered questions. Many states that have legitimate concerns. If those seeking reform insist on swinging for the fences they will strike out. I believe senator merkley recognizes this. I appreciate his wanting to provide real concrete help for the banking act. I appreciate senator warren. I appreciate her efforts to allow the states to move at their own pace. And i believe you, mr. Chairman, mr. Brown, my friends on this committee, will see through this hearing that we must act. Thank you for holding this hearing. Thank you for the opportunity to speak with all of you today. Thank you, senator gardner. Senator merkley. Thank you very much mr. Chairman, for holding this hearing. We have a fundamental conflict regarding states rights and federal rights. It was way back in 1996 that oregon developed a Medicinal Marijuana program. So thats quite a long time ago were talking 23 years. During that period, we have seen that the nation has changed, and many states have exercised their state rights, their state rights, to address what they felt was in the best interest of their citizens. But there is a heavy hand in the federal government here trying to make life as miserable as possible for citizens across our nation. So our basic argument is, lets stand with states rights. Lets stand with the judgment from across the nation, that individuals are doing the ledge laytors are doing the best they can for their people. And not proceed to create a federal chaos that is good for Money Laundering and its good for organized crime and its good for robbery, and its good for cheating on your taxes, and its good for cheating on your payroll, but its bad for citizens. Lets correct this problem in this fundamental relationship. Im delighted that one of my consist wents, rashel props of Maps Credit Union is here to testify about the viewpoint from our state. But across the country, businesses operating legally under state laws are faced with banking and safety challenges. Oregon passed their ballot measure and for the use of cannabis, a vote of the people, way back 22 years ago. And in 2014 passed another measure legal laidsing adult cannabis. However these businesses and others that service the industry, landlords, lawyers, Security Companies, others, have been operating in all cash without access to bank accounts. I have here 129 stories from oregon and across the nation that id like to submit for the record. Without objection. Id like to note that among these stories, one is regarding a certified hemp processing, hemp, now we chose as congress federally to legal lies hemp as an ordinary farm product in the last years farm bill. But unfortunately this provision that we have regarding cannabis has been extended in many cases to completely hamper the ability of the hemp Agricultural Industry which is exploding across the country to be able to operate with our normal Financial Services. And andrew an attorney in portland, oregon had two banks closed because of his providing legal services. Do we really want the situation where citizens operating under states rights in their country, are unable to access attorneys services . That is not a provision acceptable under the vision of equal justice under the law. Forcing Legal Businesses to operate in all cash is dangerous for our communities. I saw this with my own eyes when i joined Tyson Hayworth on a trip to the capital to pay his tax bill. He had 70,000 in a backpack. It spread out across the table. Some of it fell on to the floor. Thats a lot of money to be carrying around in a backpack. We had to go through three levels of security for him to be able to pay his taxes. As you approached the building, there were police cars and patrol members and then they would tell you which floor to go to but not which room and then you had another set of security and another set in the room where you deposited p because millions of dollars in cash were flowing in from all corners in the state. This is one of the most absurd things that i have ever witnessed. It created theres a lot of the costs that reverbrate back through the industry that are unfair and unacceptable and dangerous. Were putting safety at risk when companies are conducting themselves legally under state passed legislation, state rights. So many constituents have reached out to share their stories, and thats why were delighted that youre holding this hearing, for a chance for us to present these stories to the committee for consideration. I appreciate the work of the oregon retailer of cannabis sosh jaigs, the National Cannabis industry association, and normal the National Organization for the reform for sharing and putting together these stories ive submitted for the record. Across the country more and more states are following the example established in the initial states more than two decades ago. Red states, blue states, purple states, whether its allowing the cultvation of hemp and its derivatives of cbd which was legalized, or taxing and regulating medicinal and adult use cannabis. In my home state we took in over 80 million in taxes. Thats 80 million traveling down the roads and highways in duffle bags and backpacks. Ive heard from dozens of people operating Legal Businesses that have had to work in cash or risk having lines of credit cut off. Todd these, he from my own town, told my office not only has he lost business accounts but his employees have loft their personal business accounts and credit cards, spouses have lost their personal bank accounts. Many employees are fearful as a result of these changes they will lose their Credit Rating and be unable to buy a house or have their mortgages or loans canceled. So to sum up, thank you for holding this hearing. A chance to present this conversation. There is nothing good about forcing the world to operate on cash. It is an invitation to Money Laundering. It is an invitation to organized