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What does the Recently Approved SAFE Banking Act Mean for the Cannabis Industry?

Perhaps you’ve wondered why you have to pay cash or use your PIN debit card at Fluent dispensaries, or even hesitated when you got to the register? I mean, this stuff is legal, right? So what’s with the cloak-and-dagger of it all? 

 

Unfortunately, this is another case of federal vs. state governments disagreeing on cannabis regulation. The state says it’s legal. The House says, “Let’s party like it’s 2019!” The Senate says they’re sticking to their usual stance of “no legalization” (for now).  The banks say, “We do what the feds tell us to do.” Consumers are left saying – “WTH, who even carries cash anymore?” 

 

Recently, the U.S. House of Representatives sought to end this disconnect when it passed H.R. 1595: Secure And Fair Enforcement Banking Act of 2019 (otherwise known as the SAFE act). After being introduced in the House in March 2019, the bill passed on September 25th with a significant, bipartisan majority vote of 321 to 103.

 

The general overview of this bill, as summarized by GovTrack, is “To create protections for depository institutions that provide financial services to cannabis-related legitimate businesses and service providers for such businesses, and for other purposes.” In other words, federal laws that still render marijuana a Schedule I illegal drug prevent legitimate companies like ours from utilizing federal banks. This bill seeks to end that, allowing companies like ours to use standard, federal, banking.

 

NORML (the organization working to reform marijuana laws) explains the bill as such: “Currently, hundreds of licensed and regulated businesses do not have access to the banking industry and are unable to accept credit cards, deposit revenues, or write checks to meet payroll or pay taxes. This situation is untenable. No industry can operate safely, transparently, or effectively without access to banks or other financial institutions. Congress must move to change federal policy so that these growing number of state-compliant businesses, and their consumers, may operate in a manner that is similar to other legal commercial entities.”

 

The banking change would so more than just make for easier and safer transactions.  Opening Federal Banking to the Cannabis industry will allow companies like ours to invest in large-scale capital projects.  Greater investment will lead to increased cannabis innovation.   

 

Now for the bad news. The bill still has to pass the Senate, and then get signed by the President before it’s enacted (we heard he’s busy with other stuff, maybe he’ll throw us a bone?). While Senate passage is not highly likely based on previous bills, the House vote far exceeded expectations on the Republican side – it was sponsored by Rep. Ed Perlmutter (D-CO), and nearly half of all Republicans (91 members) joined them. Compared to a similar bill proposed in 2014, Republican support grew 68%. So, the GOP starting to get with the program.  

 

Perhaps the Senate will listen to what the people of this country want – 62% of them, to be exact, according to a 2018 Pew Research report, which is legalized marijuana. Regardless of the outcome, the message to our federal government is clear: this is a booming business, legal in many states, and you need to start treating it as such if you want to keep your job(s). 

 

Image Credit: ShutterstockProfessional

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