Oregon Gov. Tina Kotek recently rejected a bill that would have created a State Public Bank Task Force. The 19-person team would have studied the pros and cons related to a cannabis business banking solution in the form of a public bank and would have proposed recommendations for implementation. 

Chief sponsors included Rep. Mark Gamba, Rep. Jules Walters, and Sen. Jeff Golden, who introduced House Bill 2763 in January. The bill steadily made its way through the House and Senate and was passed by both by the end of June before it was vetoed by Kotek on Aug. 4.

In a press statement published on July 28 to cover her thoughts on “potential vetoes,” Kotek said that she took issue with HB-2763. “Reason for possible objection: While the Governor supports exploring the creation of a state bank, this bill has several logistical challenges, including directing the Oregon Business Development Department (OBDD), which already manages over 80 programs, to manage a new task force, establish an RFP process, and finalize a substantive report on an abbreviated timeline,” the notice stated.

Had HB-2763 been approved, it would have explored “potential benefits and harms from the bank to state and local jurisdictions and private industries,” as well as “governing and corporate structures for the bank” and other goals. Ultimately, the task force’s research would have served as a way to create a publicly controlled bank that would save public dollars, and “spur greater economic activity within this state.” The task force would have also provided a detailed report of its findings on or before September 2024.

Furthermore, both committees sought to “…analyze challenges and barriers to providing banking services to legal adult-use cannabis businesses and examine pathways to allowing banking services to the burgeoning cannabis industry in New York.”

Banking access for cannabis businesses is an issue nationwide, and other states have attempted to pass legislation to ensure the safety of cannabis business owners as well as further legitimize the industry.

In March 2022, Pennsylvania legislators Rep. John DiSanto and Rep. Sharif Street proposed a cannabis banking bill. “Access to financial and insurance services is essential for operating any business, and it is against the public interest to relegate a multi-billion-dollar industry to deal in piles of cash,” said DiSanto. “Banking this cash safely in Pennsylvania provides certainty for businesses, is a huge opportunity to grow our economy and should ultimately lower costs for medical cannabis consumers.” Former Pennsylvania Gov. Tom Wolf signed the legislation in July 2022.

Last October, Rep. Dan Donovan and former Indiana Pacers NBA athlete David Harrison proposed a banking solution called Token HiFi which would have offered a safe and reliable solution for cannabis banking services.

In December, the most recent attempt to get the Secure and Fair Enforcement (SAFE) Banking Act was introduced again, but it was left out of the National Defense Appropriations Act (NDAA). The Senate Majority Leader has led many efforts to get the bill passed, and although it has been met with opposition, progress continues to be made. “It’s a priority for me,” Schumer said about the bill last year. “I’d like to get it done. We’ll try and discuss the best way to get it done.”

At the time, Republican opponents such as Senate Majority Leader Mitch McConnell accused Democrats of including “unrelated” items in the defense bill. “Even now, House and Senate Democrats are still obstructing efforts to close out the NDAA by trying to jam in unrelated items with no relationship to defense,” said McConnell. “We’re talking about a grab bag of miscellaneous pet priorities—like making our financial system more sympathetic to illegal drugs, or the phony, partisan permitting-‘reform’-in-name-only language that already failed to pass the Senate this year.”

Earlier this year in May, the New York Assembly Standing Committee on Banks and the Assembly Standing Committee on Economic Development, Job Creation, Commerce, and Industry held a hearing to discuss its benefits. “Operating a cash-only business raises challenges including security, payroll, access to loan products, and recordkeeping,” the public hearing memo stated. “These challenges impact both the legal cannabis-related businesses and the banks seeking to provide services.”

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Former Rep. Dan Donovan, who held his position as a New York House representative between 2015-2019, and former Indiana Pacers NBA athlete David Harrison, recently announced their partnership to create a new banking solution called Token HiFi. Donovan is taking on the mantle of Chairman, while Harrison is the company co- CEO and founder, in addition to Chief Strategy Officer and founder Chris Yim.

The company’s goal is to offer a safe and reliable solution for cannabis banking. “Token HiFi is a new cannabis business membership that offers a digital asset and exchange platform to facilitate secure, valid, and trusted financial deposits and transactions for industries locked out of traditional banking services,” the company explains on its website. “Token HiFi’s patented B2B closed-loop digital asset transfer technology, known as DAVOS (Digital Authorization & Verification Operating System) is a convenient, safe, secure, and reliable encrypted utility token that acts as a value store and medium of exchange.”

Potential business owners, once they receive a compliance ID from Token Hifi, can purchase coins for this system. The coins can be used to “pay, transfer, and exchange funds with suppliers and affiliated businesses,” using armored trucks and physical cash pick-up. Finally, customers will be able to receive the value of their coins “whenever they choose and at any time,” the website states.

Although Token Hifi was founded in February 2022, the company has not yet officially launched.

The former Pacer is no stranger to cannabis. In 2015, he spoke about his off-season cannabis consumption during his first three seasons with the Indiana Pacers (between 2004-2007), due to stress caused by working with then-coach Jim O’Brien. “It wasn’t in his game plan for me to succeed. Being around him was probably the worst time I’ve had in my life,” Harrison said. In the 2007-2008 season, he smoked cannabis daily, which eventually led to being suspended for five games after he was found in violation of the league’s anti-drug policy.

“It wasn’t healthy,” Harrison said. “I literally had to smoke pot every day so I would not hurt him. I would avoid him. I’d come in early and stay late. It wasn’t like he hit me; he verbally abused me. But what coach doesn’t?”

According to the Token Hifi website, Harrison went on to start five cannabis grow facilities.

Banking still continues to be an issue for legal cannabis businesses across the country. Although there was some hope that the Secure and Fair Enforcement (SAFE) Banking Act would be passed in the recently proposed defense spending bill, it was removed earlier this month. If passed, it would have prevented federal banking regulators from penalizing banks that sought to serve cannabis-related businesses. 

Senate Majority Leader Chuck Schumer expressed his desire to continue pushing the bill this year. “It’s a priority for me,” Schumer said. “I’d like to get it done. We’ll try and discuss the best way to get it done.”

Schumer was also hopeful about getting the bill passed earlier this November. “I am working in a bipartisan way with Democrats and Republicans to take the SAFE Banking Act, which allows financial institutions to involve themselves in cannabis companies and lend money to them—but it also does some things for justice, such as expunging a record,” Schumer said. Politico reported that Schumer spent the past weekend pushing to include the cannabis banking bill before the congressional session ends.

The SAFE Banking Act has passed through the House numerous times in the past, with a historic approval back in September 2021 as it was included in the Military Spending Bill.

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