Introduced in the U.S. House of Representatives last week, the Secure and Fair Enforcement (SAFE) Banking Act of 2021 has already been supported by more than 100 members of Congress.
H.R. 1996 would enable marijuana-related businesses in the forty-seven states, four U.S. territories, and the District of Columbia that have legalised cannabis to some degree to access the nation’s banking system.
While close to 98% of the U.S. population lives in jurisdictions that have legalized recreational or medical cannabis in some way, many legal businesses still have issues with accessing banking services. In the case of hemp, banking challenges remain even though hemp was made legal at a federal level through the 2018 Farm Bill.
The situation has created a number of problems, including security risks as many businesses are still operating on a cash basis.
The U.S. cannabis industry is currently valued at $17.7 billion, a significant proportion of which remains unbanked. Cannabusinesses are prime targets for theft, robberies and burglaries. Getting this cash into the financial system would not only improve the security situation, but also give institutions more money to lend during the COVID-19 pandemic economic recovery period.
Reintroducing the SAFE Banking Act legislation, U.S. Rep. Ed Perlmutter said:
“The genie is out of the bottle and has been for many years. Thousands of employees and businesses across this country have been forced to deal in piles of cash for far too long, and it is the responsibility of Congress to step up and take action to align federal and state laws for the safety of our constituents and communities.”
In addition to improving safety and security for cannabis businesses and injecting cash into the financial system, the SAFE Banking Act would provide protections from money laundering laws for state-legal marijuana businesses, and added protections for hemp and hemp-derived CBD businesses. This latest version of the bill includes some minor changes to safe harbor, strengthened hemp provisions and other technical updates.
This isn’t the first time the SAFE Banking Act has been presented. It passed the House in 2019 by a vote of 321-103 but then stalled in the Republican-controlled Senate. Senators Merkley and Daines plan to introduce the reintroduced SAFE Banking Act in the Senate soon, where it is expected to have an easier journey this time around.
The bill is also supported by a wide variety of organizations and businesses, including the American Bankers Association.