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Wednesday, Jun 29, 2022
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.


SAFE Banking Act inclusion in defence bill improves odds of passing Senate, lawyer says

Previous attempts to pass legislation critical for state-legal cannabis operators has been thwarted largely by Republican lawmakers

U.S. Capitol and Senate fountain from a distance
A standalone SAFE Banking Act hasn't been able to clear the U.S. Senate. Image via US Capitol Flickr

A measure that would protect financial institutions working with state-legal cannabis businesses from federal prosecution is heading to the House of Representatives again but this time, in a way that might finally push it through the Senate.

On Tuesday evening, the House Rules Committee added the bipartisan Secure and Fair Enforcement (SAFE) Banking Act as an amendment to the National Defense Authorization Act (NDAA) for the 2022 fiscal year. This grants the bill passage to floor consideration, which is expected later this week.

In April, the SAFE Banking Act passed the House with a 321–101 vote as a standalone bill, which hasn’t been able to clear the Senate. The bill has passed four other times in the House in some form since 2019.

There has been a resistance from the federal government to reform cannabis laws at the federal level, says Amanda Barton, lawyer and partner with Mr. Cannabis Law.

But she notes that the Republicans were split in the SAFE Act vote earlier this year, with 106 votes in favour and 101 against.

“Generally speaking, the Republican Party greatly values the U.S. military and prioritizes the proper national defense of our country. In my opinion, the recent addition of the SAFE Banking Act to the NDAA will increase the likelihood of success in the passing of the Act by the Senate, as the previous 2019 and 2021 bills have failed to make it out of Senate committees,” she explains in an email to Mugglehead.

The legislation would shield financial institutions that service state-legal cannabis businesses without federal interference while weed remains scheduled.

Proceeds from legal weed stores wouldn’t be considered unlawful anymore, so banks wouldn’t have to work around anti-money laundering laws to conduct business with cannabis companies. And the SAFE Banking Act would open up credit card transactions for pot businesses that have been limited to cash-only, making them more susceptible to theft.

In March, bill sponsor Rep. Ed Perlmutter said federal cannabis reform could help with economic recovery from the pandemic, noting the current situation is a risk to public safety.

“Thousands of employees and businesses across this country have been forced to deal in piles of cash for far too long, and it is the responsibility of Congress to step up and take action to align federal and state laws for the safety of our constituents and communities,” he explained.

In a letter to congressional leadership, advocacy organization NORML supports the measure’s inclusion in the defense bill, noting no licensed industry can operate safely and transparently without access to financial institutions.

Read more: US civil and human rights coalition urges passing of MORE Act

Read more: US Senators present draft bill to federally decriminalize cannabis

“It is critical to balance the need to accomplish comprehensive reform at the federal level and make every effort possible in the immediate term to support the successful state-level programs to ensure safe and efficient consumer access to quality cannabis that is cost-competitive with the unregulated market,” says political director Justin Strekal in a statement.

Despite the majority of states implementing medical cannabis programs, and nearly half of the population living in jurisdictions where adult-use is legal, “The ability of businesses to operate in a way that provides safe and affordable access to cannabis is unnecessarily difficult because of their ongoing lack of access to basic banking services,” he adds in the letter.

If cleared by a House of Representatives vote, the SAFE Banking Act will head to the Senate, again.


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