SAFE Banking Act

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The U.S. House of Representatives just approved a bill to allow banks to work with cannabis companies in legal markets.

In the short history of U.S. states with legal cannabis markets, access to safe banking services has remained a loud and consistent complaint.

The crux of the issue lies with the federal regulation of banking practices. Given cannabis remains illegal at the national level, banks have thus far been largely unwilling to work with state-legal cannabis companies for fear of federal repercussions.

On Monday, April 19, the U.S. House of Representatives took a bold step towards amending this issue by passing new legislation that would permit banks “to provide services to cannabis companies in states where it is legal” by a vote of 321-101. The bill will now head to the Senate.

…but will Joe Biden sign it?

This is the $10 billion question.

For context, this is actually the fourth time that the House has approved the Secure and Fair Enforcement (SAFE) Banking Act. What’s happened the previous three times? Under the Republican-controlled Senate, the measure was never moved forward in three prior efforts over the past two years.

Perhaps four times is the charm?

Marijuana Moment’s Kyle Jaeger recently suggested as much, noting that with Democrats in control of both chambers of Congress as well as the White House, “there are high expectations that the proposal will make its way through the Senate and onto the president’s desk.”

This is about more than dollars and cents.

Without access to banking services, many cannabis companies still deal largely in cash. Beyond the hassle this presents when it comes to things like monthly bills, payroll, and vendor orders, it also leads to people attempting to pay their business taxes with garbage bags full of cash.

Denial of access to banking services is also an equity issue, as California State Treasurer Fiona Ma – an advocate for cannabis banking reforms both at the state and federal level – explained in a Q&A with CannabisWire last August.

“The people who are able to sustain are those who have been doing this for a long time, have saved up a lot of money, who have access to people who are in the banks because of their past credit, or their investors… [but] the smaller, more marginalized social equity applicants just can’t make it without some sort of assistance.”

Next up: Democratic Senate Majority Leader Chuck Schumer (D-NY) will see if he can move the SAFE Banking Act through his chamber with only the possibility of a one-vote majority at his disposal.