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The Senate Banking Committee passed a new version of a cannabis banking bill, “raising hopes for the cash-dependent cannabis sector to get access to regular banking services,” Reuters reported. A bipartisan group of senators reintroduced the Secure and Fair Enforcement Regulation (SAFER) Banking Act last week. The bill “will help make our communities and small businesses safer by giving legal cannabis businesses access to traditional financial institutions, including bank accounts and small business loans,” the senators said in a joint statement last week. “It also prevents federal bank regulators from ordering a bank or credit union to close an account based on reputational risk,” they added. On Wednesday, the committee voted 14-9 to send the bill to the Senate floor with a few amendments.
If passed, the bill would provide legal protection for banks and other financial institutions if they service legal cannabis businesses. Previous iterations of the bill have passed the House seven times, but this vote marks the first time it was advanced in the Senate. While support for the bill is bipartisan, so is the opposition. It may be finally set to hit the Senate floor for a vote, but the path forward is still complicated.
Up next, the bill “faces a possible federal government shutdown on Oct. 1 amid a political battle between the Democrat-controlled Senate and the Republican-controlled House of Representatives,” MJ Biz Daily noted. A shutdown would “pose risks for SAFER Banking as it winds its way through Congress, burning time that legislators could otherwise use to pass legislation.”
A ‘historic moment’ for cannabis industry advocates
Sen. Jeff Merkley (D-Ore.), the lead sponsor of the bill, deemed the passage a “historic moment” and an “example of significant bipartisan cooperation,” CNBC reported. Making legal cannabis businesses operate as cash-only “is dangerous for our communities,” Merkely noted, calling it “an open invitation to robberies, muggings, money laundering, and organized crime.” He remains determined to build “bipartisan momentum to finally get a bill signed into law that ends the cannabis cash economy and improves public safety across the nation,” he added.
Calling the Senate committee vote a “milestone victory in the history of the sector is to make a gross understatement,” Forbes‘ Iris Dorbian said. Passing the bill will protect businesses from the threat of theft and criminal activity and enable them to “open accounts with mainstream banks,” Dorbian added. “Leaders in the community are rightfully applauding the Senate Committee’s passage of this landmark legislation.”
The bill could bring “much-needed clarity and security to financial institutions willing to serve state-sanctioned marijuana businesses,” Mike Bologna, CEO of vaporizer provider Dip Devices, told Dorbian. Passing the bill would “facilitate easier access to capital, encourage more responsible financial practices, and foster innovation within the cannabis industry.”
The bill protects financial institutions at the expense of others
Sen. Raphael Warnock (D-Ga.), who voted against the act, worried the bill would only expand the racial wealth gap in the legal cannabis industry and “just make the comfortable more comfortable,” he said per The Hill. The bill would make it safer for “bankers, for businesses and financial institutions,” including some who profited “from the cannabis industry illegally for years,” Warnock added, “which is ironic given many of the regular folks who illegally sold or used cannabis are sitting in jail cells right now,” Warnock said.
Republicans think the tweaked bill does not do enough to include other industries prone to losing accounts due to recreational risk. The legislation would give “special protections to businesses conducting a federally illicit activity that legal businesses simply do not enjoy,” Sen. Mike Rounds (R-S.D.) said, per The Hill report. “Meanwhile, legal industries such as firearms or traditional fuel sources still must fight to even hold accounts.”
Taking issue with language within the bill that allowed banks to cease business based on reputational risk, Sen Mike Crapo (R-Idaho) argued that it didn’t do enough to keep banking regulators at bay. “You cannot force our financial institutions in this country to cease banking clients because their industry is disfavored,” Crapo said, according to Courtroom News Service.