You Should Know This About The Marijuana Industry’s SAFE Banking Bill

Last Updated on March 8, 2021 by Corepay

The House of Representatives passed the historic SAFE banking bill — Secure and Fair Enforcement Act of 2019 — which would allow banks to work with cannabis-related businesses without violating federal law.

Right now, even though several states have legalized marijuana for recreational and medical use, most banks are not allowed to do business with them because marijuana is still illegal at the federal level.

Before the vote, Neal Levine, CEO of the Cannabis Trade Federation, said in an emailed statement to Forbes, “Allowing the cannabis industry to access banking services will reduce its reliance on cash and greatly improve safety for cannabis businesses, employees, and consumers. It will also increase transparency and help law enforcement deter and detect illegal operations.”

The vote passed by a wide margin, 321 – 103, with 229 Democrats, 91 Republicans, and one independent all voting in favor of it, while 102 Republicans and 1 Democrat voted against.

The SAFE Banking bill itself will help public safety, as well as reduce the likelihood of robberies of the cash-heavy businesses. It was designed to prohibit federal financial regulators from terminating or limiting deposit insurance, as well as barring them from encouraging a bank to close a business’ accounts for the sole reason of being a cannabis or hemp-related business.

Meanwhile, in California, the state’s senate majority leader, Robert Hertzberg has been trying to start a state-level banking system specifically for the cannabis industry.

The passage of the SAFE Banking bill is the furthest a cannabis-related banking bill has gotten in the political process, but don’t get too excited. As Mike Adams in Forbes Magazine predicted, Senate Majority Leader Mitch McConnell is the biggest hurdle yet to remain. It’s not that he’s opposed to marijuana reform, because he hasn’t said whether he would support this or not.

Instead, says Adams, “:

. . . (T)he self-proclaimed Grim Reaper of Capitol Hill has made it abundantly clear over the past nine months or so that he isn’t interested in furthering the Democrat’s agenda. The SAFE Banking Bill, while bipartisan by design, is still dominated by Democratic ideas. There are 180 Democrats signed on as co-sponsors and only 26 Republicans. That’s hardly enough Republican support in the House to convince McConnell to swallow his pride and just go with the flow.

However, Fox Business said the bill “. . .could be amended to gain passage.” Their own version of the bill has 33 co-sponsors, or one-third of the entire Senate, so there could be some activity on that front.

But even if the SAFE Banking bill passes, it still requires the President’s signature, and given everything going on in the White House right now, there may not be a lot getting done for a while. So we’re keeping our fingers crossed that this will pass, but it may need to be revisited in 2021 with a new Congress.

Time will tell, but in the meantime, CorePay can help you find banks and credit card processors willing to do business with CBD-related businesses, even as we wait for the SAFE Act to finally pass. To learn more, just visit our website or call us at (800) 408-0095.

Photo credit: Rick Obst (Flickr, Creative Commons 2.0)