SAFE Banking Act Reintroduced in the U.S House and Senate

FOR IMMEDIATE RELEASE
Wednesday, April 26, 2023

CONTACT:

Aaron Smith, CEO and Cofounder
(888) 683-5650, Aaron@TheCannabisIndustry.org

Bethany Moore, Communications Director
(240) 678-2654, Communications@TheCannabisIndustry.org

SAFE Banking Act Reintroduced in the U.S House and Senate

Advocates call for passage of bipartisan SAFE Banking Act to open the financial system to licensed cannabis businesses

WASHINGTON, D.C. – Today, a bipartisan group of lawmakers reintroduced the Secure and Fair Enforcement (SAFE) Banking Act in the U.S. Senate and House of Representatives. This bicameral legislation, which was introduced by Sen. Jeff Merkley (D-OR), Sen. Steve Daines (R-MT), Rep. Dave Joyce (R-OH), and Rep. Earl Blumenauer (D-OR), would protect financial institutions from federal prosecution for providing services to cannabis businesses operating in compliance with state laws.

Federal banking regulations currently do not recognize the legal cannabis industry that exists in dozens of U.S. states, creating a significant barrier for licensed businesses accessing banking and financial services. This creates transparency issues for the industry and government officials tasked with regulating it and has led to cannabis businesses being increasingly targeted for robbery with sometimes fatal results.

Providing a safe harbor for financial service providers to work with cannabis businesses would also allow for traditional lending, which is currently limited throughout the industry. This lack of access to capital most adversely affects small and minority-owned businesses.

Previous versions of the SAFE Banking Act have been approved by the House with wide margins and significant bipartisan support seven times over the past two congressional sessions, however, the bill has so far stalled in the Senate. Advocates are hopeful that the legislation will receive a hearing and an affirmative vote in both chambers and signed into law this year, as more states continue to enact laws licensing cannabis sales.

There are currently 322 House members and 76 senators representing states with comprehensive medical or adult-use cannabis laws and whose constituents would directly benefit from passage of the SAFE Banking Act.

“With a supermajority of Congress now representing a state with licensed cannabis sales, enacting this sensible and necessary legislation should be among the least controversial issues before the Senate today,” said National Cannabis Industry Association co-founder and CEO Aaron Smith. “This bill is a common sense step toward improving public safety and transparency while also opening much-needed access to capital to struggling small businesses throughout the nation.”

A November 2022 Gallup survey found that 68% of Americans support making cannabis legal for adults and a recent Pew Research Center poll found that less than 10% of Americans still support marijuana prohibition.

Over 100 National Cannabis Industry Association members are expected to travel to Washington, D.C. to lobby for the passage of the SAFE Banking Act and other industry priorities at the organization’s 11th Annual Cannabis Industry Lobby Days May 16-18.

Laws to make cannabis legal for adults have passed in 22 states as well as the District of Columbia and the territories of CNMI and Guam, and 38 states, as well as several territories, have comprehensive medical cannabis laws. Nearly three in four Americans live in a state where cannabis is legal in some form.

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The National Cannabis Industry Association (NCIA) is the largest cannabis trade association in the U.S. and the only organization focused on representing small and independent cannabis-related businesses at the national level. NCIA promotes the growth of a responsible, sustainable, and inclusive cannabis industry and works for a favorable social, economic, and regulatory environment for that industry throughout the United States.

SAFE Banking Act Reintroduced in Senate

Bipartisan measure to improve public safety, transparency, and access to capital would protect financial institutions working with state-legal cannabis businesses

WASHINGTON, D.C. – On Tuesday, a bipartisan group of lawmakers reintroduced the Secure and Fair Enforcement (SAFE) Banking Act in the U.S. Senate. This legislation, which was introduced by Sens. Jeff Merkley (D-OR) and Steve Daines (R-MT) along with 27 original cosponsors, would protect banks and other financial institutions from federal prosecution simply for providing services to cannabis businesses that are operating in compliance with state laws.

Due to the threat of federal penalties and costly reporting requirements, most financial services companies will not work with state-legal cannabis businesses, forcing the majority of the regulated industry to operate on a cash-only basis. This creates numerous public safety and transparency issues for the industry, law enforcement, government officials, and other service providers, and has led to cannabis businesses being increasingly targeted by criminals with sometimes fatal results.

“No one working in a store or behind a register should have to worry about experiencing a traumatic robbery at any moment,” said Sen. Merkley. “That means we can’t keep forcing legal cannabis businesses to operate entirely in cash – a nonsensical rule that is an open invitation to robbery and money laundering. Let’s make 2021 the year that we get this bill signed into law so we can ensure that all legal cannabis businesses have access to the financial services they need to help keep their employees safe.”

Providing a safe harbor for financial service providers to work with cannabis businesses would also allow for traditional lending, which is currently unavailable to almost all of the industry. This lack of access to capital most adversely affects small businesses and marginalized communities that are trying to break into the industry and thrive in the absence of generational wealth and deep financial networks.

Companion legislation was reintroduced in the House last week. It was first passed in that chamber in a historic floor vote with overwhelming bipartisan support in September 2019, and was included in the language of two subsequent House-approved pandemic relief bills in 2020. The Senate version stalled under the leadership of then-Senate Majority Leader Mitch McConnell (R-KY) despite bipartisan sponsorship prior to the pandemic, which de-prioritized stand-alone cannabis legislation in that chamber.

There are currently 72 senators representing states with comprehensive medical or adult use cannabis laws and whose constituents would directly benefit from passage of the SAFE Banking Act, including 25 Republicans.

“With new Senate leadership now firmly in favor of cannabis policy reform, we are optimistic that this narrowly tailored – but absolutely necessary – legislation will be allowed to progress through the hearing process without delay,” said Aaron Smith, co-founder and chief executive officer of the National Cannabis Industry Association (NCIA). “This bill is a meaningful first step that will have immediate benefits in terms of safety, transparency, fairness, and much-needed economic opportunities while Congress continues working toward more comprehensive solutions to end prohibition and sensibly regulate cannabis.”

Cannabis is legal for adults in 15 states as well as the District of Columbia and the territories of CNMI and Guam, and 36 states as well as several territories have comprehensive medical cannabis laws. The substance is legal in some form in 47 states. Virginia is poised to become the 16th state – and the first in the South – to regulate cannabis for adults after its lawmakers sent legislation to Gov. Ralph Northam for approval last month.

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