Congress should oppose the UN-SAFE Act

Over the past week, many have discussed the recent congressional hearing for the so-called SAFE Act, a bill that supporters say would grant the marijuana industry access to the federal banking system. In reality, this bill should be renamed the UN-SAFE Act.

Let me explain why.


This proposed bill does not protect community banks or credit unions. Under the Money Laundering Control Act of 1986 (“MLCA”), banks are prohibited from providing financial services to businesses that are engaged in illicit activities. These provisions are enforced, in part, through the Bank Secrecy Act (“BSA”).

While this bill claims to provide a safe harbor under the MLCA and BSA to banks serving the marijuana industry, it will have no practical effect as the use, possession and distribution of marijuana remains illegal at the federal level under the Controlled Substances Act, which preempts all state laws intended to govern the marijuana industry.

So, the SAFE Act would fail to do the very thing it is purported to do, but it would indeed have some effects. One thing this legislation would do is introduce existing criminal elements into the banking system. Contrary to the promises of legalization supporters, the black market hasn’t gone away in legalized states. Many unlicensed operators have store-fronts, delivery services, and even pay for internet advertising. It is not far-fetched to believe they would also apply for bank accounts if given the opportunity.

In Oregon, 70 percent of marijuana transactions were found to be on the black market several years after legalization with its illicit marijuana being trafficked to 37 states. California growers admit to growing five to twelve times the amount of marijuana compared to what the state consumed. The remainder was shipped out of state. These organized crime networks are not small enterprises. Foreign cartels and crime syndicates have set up shop in Colorado and California, growing marijuana on federal lands and in subdivisions using indentured servitude.

We should also watch closely as to what is happening with our neighbor to the north. Access to banking in Canada has allowed offshore firms to invest in marijuana, some with ties to organized crime. We should not repeat Canada’s mistake. Andrew Lelling, the U.S. Attorney for Massachusetts, warns, “…marijuana trafficking whether done legally under state law or not can be a source of revenue for organized crime. It can be pursued illegally out of state and the drugs moved into state.”

With regard to public health and safety, the marijuana sold today in pot shops is orders of magnitude more potent than anything available at any point in history. Extracts that have been declared "legal" under state law can go up to 99 percent purity for the active ingredient THC, earning nicknames like "green crack," "wax," and "shatter."

This new, high potency pot is having devastating effects on the mental health of our young people. The National Academies of Science conducted a comprehensive review of thousands of studies of the effects of marijuana on the brain and came to the conclusion that there were significant links with serious mental illnesses, including psychosis, schizophrenia and suicidal ideation. More frequent use was linked with stronger negative effects. That is why every major medical society has opposed the legalization of marijuana.

The people and businesses who deposit the proceeds from the sales of high potency marijuana, concentrates, and gummies will still be violating the Controlled Substances Act. That is no small matter, and it is very disturbing that those businesses would be willing to take that risk and overlook its implications in order to service an industry that is so harmful to public health.

Most importantly, the bill is a backdoor means to accomplish full federal legalization — a mistake that will bring in more drugged driving deaths, opioid use, and psychosis and violent crime.

Kevin Sabet is a former senior drug policy advisor to President Obama and current president of Smart Approaches to Marijuana.