The U.S. House of Representatives has overwhelmingly approved legislation that would provide legal cover to banks and credit unions that want to accept deposits and provide other financial services to cannabis businesses. This is a huge step toward normalizing the cannabis industry and eliminating the glut of greenbacks the industry has been forced to deal with since states began legalizing the cultivation, sale and use of cannabis products.
“American voters have spoken and continue to speak, and the fact is you can’t put the genie back in the bottle,” said Rep. Ed Perlmutter (D-Colo.), author of the legislation. “Prohibition is over. Our bill is focused solely on taking cash off the streets and making our community safer.”
The Secure and Fair Enforcement (SAFE) Banking Act, enjoyed broad bipartisan support, with 91 Republicans joining 229 Democrats to approve the measure in a September 25 House vote. While Senate passage of the measure is no guarantee, the fact that the full House aprpoved the measure is a major coup in itself, as no such legislation had ever previously made it to the floor for consideration in either house of the U.S. Congress.
Laws in 33 states and the District of Columbia now permit the use of cannabis products, like marijuana and CBD oils, for medicinal and adult recreational purposes. These laws, in turn, have sprouted a vibrant market for cannabis products. According to some estimates, the cannabis industry will generate about $10 billion in sales this year and as much as $80 billion by 2030.
But most cannabis businesses today are forced to operate on a cash-only basis. That’s because financial institutions, fearful of running afoul of federal prohibitions on cannabis and potentially getting shut down, decline to work with businesses known to be involved in the cannabis industry. This, in turn, has created a significant public safety risk, as cannabis businesses flush with greenbacks have become targets for criminals, which not only puts the those businesses at risk, but communities at large.
The SAFE Banking Act seeks to harmonize state and federal laws related to cannabis by prohibiting federal regulators from taking punitive actions against financial institutions that provide banking services to state-sanctioned cannabis businesses, as well as ancillary business that serve them. (Think landlords, electricians, etc.). The legislation provides a safe harbor for any bank or credit union that chooses to work with cannabis businesses provided those businesses hold and maintain licenses from state or local governments to grow, transport, display or sell cannabis products.
Similar legislation has been introduced in the Senate by Senators Cory Gardner (R-CO) and Jeff Merkley (D-OR). A hearing on the Senate bill was held in July before the Senate Banking Committee, and the chair of that committee, Senator Mike Crapo (R-ID), has promised a committee vote on that legislation this fall.
The SAFE Banking Act also enjoys the support of a wide range of national organizations and state officials, including the National Association of Attorneys General, United Food and Commercial Workers Union, the Credit Union National Association, the American Bankers Association, the Electronic Transactions Association, 20 governors and 18 state banking supervisors.
“Today is a step forward for a common-sense bill that will make communities across the country safer,” Representative Steve Stivers (R-OH), a co-sponsor of the bill, said following House passage of the SAFE Banking Act.
“Passing this bill keeps the right perspective: no federal regulator should block Americans’ lawful access to the financial system,” added Rep. Warren Davidson (R-OH), another co-sponsor. “This principle holds true whether you are talking about firearms or cannabis.”