Aaron Smith, CEO of the National Cannabis Industry Association, speaks during a press conference on the Safe Banking Act outside the U.S. Capitol in Washington, DC, U.S., Wednesday, Sept. 14, 2022.
Shen Ting | Bloomberg | Getty Images
A bipartisan group of lawmakers reintroduced the Safe and Fair Enforcement (SAFE) Banking Act in the House and Senate on Wednesday after legislation aimed at banking the cannabis industry stalled in Congress last year.
this billadjusted since the last session, by Democratic Senators Jeff Merkley of Oregon, Republican Senators Steve Daines of Montreal, Republican Representatives Dave Joyce of Ohio and Oregon Republicans Presented by State Democratic Rep. Earl Blumenauer.
If key banking and financial protection measures advance through committees, they could go to a vote in the Senate for the first time. The bill has always enjoyed strong bipartisan support and has previously passed the House of Representatives seven times.
“For the first time, we have a path to get SAFE Bank through the Senate Banking Committee and to a vote in the Senate,” Merkley said in a statement. “Let’s get this bill signed into law in 2023 so we We can ensure that all legal cannabis businesses have access to the financial services they need to keep their workers, businesses and communities safe.”
Senate Majority Leader Chuck Schumer (D-N.Y.) voiced support for the legislation on Thursday and said he would work to ensure it includes criminal justice provisions when it passes.
marijuana stocks Curaleaf Holdings, Trulieve Cannabis Corp and Terrascend Corp all rose by double digits on Thursday. The bipartisan nature of the reintroduction of the SAFE Banking Act appears to have boosted hopes of more relief for the industry.
“The SAFE Banking Act will provide much-needed relief to cannabis businesses of all sizes and serve as a stepping stone to broader reform,” Matt Darling, CEO of multistate cannabis operator Curaleaf, said in a statement after the bill was reintroduced express.
Under current federal law, banks and credit unions face federal prosecution and penalties if they provide services to legal marijuana businesses, since marijuana remains a Schedule I substance, in the same category as heroin and LSD. Schedule I substances are defined as drugs that have no currently accepted medical use and are at high risk of abuse, According to the Federal Drug Enforcement Administration.
Without access to financial services, state legal marijuana businesses are forced to operate on cash only, which can lead to robbery, money laundering and organized crime.
“This legislation will save lives and livelihoods. Congress has gone over the past to address the unreasonable, unfair and unsafe ban on essential banking services to state legal cannabis businesses,” said Blumenauer, founder and co-chair of the Congressional Cannabis Caucus.
Key parts of the bill protect banks that work with state-legal marijuana businesses from federal regulators.
Under the legislation, under SAFE Banking, federal regulators cannot impose several penalties on banks:
- Prohibit, penalize, or discourage banks from providing financial services to legal cannabis businesses
- End or limit federal deposit insurance for banks if they provide these services
- Advise or incentivize banks to cease or downgrade banking services to cannabis businesses
- Take any action on loans made to owners or operators of cannabis businesses
The legislation also creates a safe harbor for banks, their officers or employees from criminal prosecution, liability and asset forfeiture. Additionally, a new component includes safe harbor regulations for underserved communities that face challenges accessing capital and providing affordable financial services.
SAFE Banking has 38 additional co-sponsors in the Senate and 8 additional co-sponsors in the House, which would be a boon for an industry in a depressed economy. For years, top executives in the marijuana industry have been pushing Congress to act on banking and other federal reforms needed to bolster their operations.
Brady Cobb, CEO of Sunburn Cannabis, Florida’s leading pharmacy chain, said in a statement, “All eyes should be on the Senate Banking Committee to make the case when it holds its first hearing in the Senate. this measure.”
“SAFE will serve as a springboard for the U.S. banking and finance industry to meaningfully participate in this emerging industry, and most importantly, it will significantly reduce the safety risks faced by the thousands of employees of this all-cash business,” he said.
Morgan Paxhia, co-founder and managing director of cannabis investment firm Poseidon, called the reintroduction of the measure a significant step forward for the industry.
“We’ve seen a lot of firsts in the legal marijuana space, including now scheduling cannabis banking reform hearings in the Senate,” Paxhia added. “This is a historic step for the Senate.”