Bipartisan bill would remove barriers for financial institutions to work with state-legal cannabis businesses
House passage expected after being approved three times since 2019
The Secure and Fair Enforcement (SAFE) Banking Act was reintroduced in the House of Representatives yesterday. This bill, which was introduced by Reps. Ed Perlmutter (D-CO), Steve Stivers (R-OH), Nydia Velazquez (D-NY), and Warren Davidson (R-OH), would provide a safe harbor for banks and other financial institutions working with state-legal cannabis businesses
In the last Congress, this legislation was the first cannabis policy reform bill brought to the floor of the House in recent history – with 206 co-sponsors – and was the first to be approved by either chamber of Congress with an overwhelming bipartisan vote of 321-103 in September 2019. The bill moved to the Senate but consideration in that chamber was delayed due to the onset of the coronavirus pandemic. The House also approved two separate pandemic relief bills last year that included the legislation’s language.
“Thousands of employees and businesses across this country have been forced to deal in piles of cash for far too long,” said Rep. Perlmutter. “It is time to enact SAFE Banking to align federal and state laws and reduce the public safety risk in our communities. I appreciate the partnership of the cannabis industry and businesses across this country who have added their voice to this effort. The SAFE Banking Act is an important first step to treating cannabis businesses like legal, legitimate businesses and beginning to reform our federal cannabis laws.”
The SAFE Banking Act would protect financial institutions from federal prosecution for providing banking and other services to cannabis businesses that are in compliance with state law, as well as help address serious public health and safety concerns caused by operating in predominantly cash-only environments. The legislation would make traditional lending more accessible for the cannabis industry, helping alleviate the lack of access to capital that has presented major hurdles for smaller businesses. It would also mandate a study on diversity in the cannabis industry. The latest version makes clear that protections would extend to financial services providers working with the hemp industry as well.
“At a time when small businesses need all the support they can get, and after cannabis businesses specifically have been providing essential services and generating significant tax revenues for states and the federal government with little to no financial relief, it is more imperative than ever to get the SAFE Banking Act passed into law,” said Aaron Smith, co-founder and CEO of the National Cannabis Industry Association (NCIA). “Lack of access to banking services continues to create serious unnecessary issues for public safety, transparency, and access to traditional lending that smaller operators desperately need. These businesses are contributing billions of dollars to the national economy every year, and need to be treated like any other legal regulated industry. We are grateful to the sponsors of this legislation who have generated strong and consistent bipartisan support year after year, and we are confident that it has a clear path to approval again.”
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 to pass adult use legislation when Gov. Ralph Northam signs a bill approved by the legislature into law.