The United States Congress is expected to vote by the end of this month on the bipartisan bill that would protect banks that service state-legal cannabis businesses from getting punished by federal regulators.
The Secure and Fair Enforcement (SAFE) Banking Act has been moving at a slow pace since it was approved by the House Financial Committee back in March. But Marijuana Moment was first to report last week the bill, which currently has 206 cosponsors, including 26 Republicans, will be brought to the House floor this month by Majority Leader Steny Hoyer (D-MD).
Despite the bill gaining considerable support from Democrats, the legislation is being amended to gain additional Republican support by including banking protections for the hemp and CBD industry, and shielding other businesses such as firearm dealers that have been targeted by federal financial regulators in the past.
The revisions are meant to entice the conservative members of Congress who otherwise would be skeptical supporting a bill that is tailored solely to help the cannabis industry.
Gaining Republican support will be crucial for the bill to pass as Democrat house leaders plan to advance the SAFE Banking Act through an expedited process that will require two-thirds of the 535 members of Congress to pass the bill.
The expanded version of the legislation will also be key in gaining support in the Republican-controlled U.S. Senate.
A companion bill, the Senate’s version of the marijuana financial services legislation, now has one-third support in the U.S. upper chamber. The Senate Banking Committee Chairman Mike Crapo (R-ID) said earlier this month that the panel would hold a vote on the cannabis banking issue by the year’s end.
Senate Majority Leader Mitch McConnell (R-KY) has publicly stated his opposition to marijuana legalization on numerous occaisions, but he has been a long-time advocate for hemp and CBD and was a key supporter of the 2018 Farm Bill. The amended SAFE Banking Act to include provisions that would help hemp companies use banking services may help in drawing his support.
Marijuana Banking Bill Will Get A Full House Floor Vote This Month, Sources Say: Three sources tell Marijuana Moment that the wheels are in motion to advance the SAFE Banking Act. https://t.co/DdmB56rC9v pic.twitter.com/2VQZUqyble
— Marijuana Moment (@MarijuanaMoment) September 13, 2019
Cannabis banking crucial for the industry
Today’s Congress has been touted as the most marijuana-friendly in history and currently there are 12 pieces of pending legislation that could serve as a catalyst for growing the U.S. cannabis industry. But the SAFE Banking Act is seen as the most likely to pass this year because it doesn’t involve touchy areas around legalization and de-scheduling, according to analysts.
Hiro Taylor, who works for a software platform that’s used by marijuana retailers, believes if the bill is passed it will be a big step forward for the industry.
“For the sector to reach its full potential responsibly, all players in it, including federal and state governments, need to be able to operate with greater transparency, efficiency, and safety regarding payments. A bill that helps to instill those qualities into the sector is very much needed,” Taylor told CNN.
The legislation would allow U.S. pot firms to access banking services as they’ve been forced to operate mostly in cash in the 33 states that have legalized the drug in some form.
Although there have been some community banks that have taken on cannabis businesses as customers, they are knowingly running the risk of federal money laundering or racketing charges. Nevada has looked for a way to pass its own banking bill and marijuana company Columbia Care has offered a different solution: the first credit card in the industry. None of those small measures, however, are lasting solutions that help each and every cannabis company in the country.
The need for marijuana businesses to have access to banks will only grow as sales continue to rise, and the potential risk will only get bigger as the industry continues to grow. Also, the potential for significant risks to public safety will only rise as legalization takes root in other jurisdictions. Relying on security guards to protect cash is not optimal, or cheap, and it makes regular business activities like paying bills and taxes much more of a struggle.
Not only is the industry pushing for the cannabis banking bill to be passed, but other offices of government and the banks themselves want to see progress on the issue. So far 50 state banking associations, the National Association of State Treasurers, the top financial regulators in 25 states, a majority of state attorneys general and the governors of 20 states have called on Congress to pass the SAFE Banking Act.