In time for 4/20, the House of Representatives voted for the SAFE Banking Act, which would protect financial institutions providing cannabis banking.
Members of Congress approved H.R. 1996, the Secure and Fair Enforcement (SAFE) Banking Act by 321-101. The bill would make it safe and legal for financial institutions to engage in business relationships with state-licensed and regulated cannabis companies.
The vote was 215-0 among the Democrats and 106-101 on the Republican side. In 2019 the SAFE Banking Act vote was 321 to 103 in favor. Two-hundred and twenty-nine Democrats and 91 Republicans cast ‘yes’ votes in favor of the measure.
“For the first time since Joe Biden assumed the presidency, a supermajority of the House has voted affirmatively to recognize that the legalization and regulation of marijuana is a superior public policy to prohibition and criminalization,” said NORML Political Director Justin Strekal.
The SAFE Act enabling cannabis banking was reintroduced in March by Members of Congress Ed Perlmutter (D-CO), Steve Stivers (R-OH), Nydia Velazquez (D-NY), and Warren Davidson (R-OH). It had 177 cosponsors.
“The SAFE Banking Act is vital for improving public safety and transparency and will improve the lives of the more than 300,000 people who work in the state-legal cannabis industry,” said Aaron Smith, co-founder, and CEO of the National Cannabis Industry Association (NCIA). “It will also help level the playing field for small businesses and communities with limited access to capital. It is time for the Senate to start considering the companion legislation without delay.”
The SAFE Act first passed the House of Representatives on September 25, 2019. It was subsequently included multiple times in various COVID relief packages that the House approved in the previous Congress. Ultimately, the language was not included in any of the COVID stimulus bills.
“We are incredibly grateful to the bill sponsors who have been working with us for the last eight years to make this sensible legislation become law and have shepherded it through the House time and again,” Smith added.
Advocates are hopeful Senate Banking Committee Chair Sherrod Brown (D-OH) will take up the bill soon so that it can move through the Senate as soon as possible. The previous Banking Chair, Mike Crapo (R-ID), was a staunch opponent of cannabis reform.
Cannabis Banking Issues
The SAFE Banking Act would protect financial institutions from federal prosecution for providing cannabis banking and other services to businesses in compliance with state law.
The legislation would improve the viability of small businesses by helping them reduce costs associated with lack of access to cannabis banking and increasing options for traditional lending that many small businesses in other fields use regularly. It would also mandate a study on diversity in the cannabis industry.
Federal law defines all cannabis-related endeavors as criminal enterprises, including commercial activities that are licensed and legally regulated under state laws. Therefore, virtually no state-licensed cannabis businesses can legally obtain a bank account, process credit cards, or provide loans to small businesses and entrepreneurs.
In Maine and Massachusetts, they got creative and tricked their software into thinking the cash registers are ATMs. So, when you buy cannabis from an adult-use store and the price does not come out to an even amount using a debit card, they give you change.
Many in the cannabis industry must operate largely on a cash-only basis.
“Today’s vote is another important mile marker on the road to repealing federal prohibition, yet much more action must still be taken by lawmakers in both chambers,” Strekal said.
This was the fourth time that the House has approved the cannabis banking language of the SAFE Banking Act. It passed initially as the first cannabis reform bill ever passed by either chamber of Congress in 2019. It then passed two more times last year as part of pandemic relief packages that were not approved in the Senate.