The U.S. House of Representatives recently passed a banking reform that is intended to benefit some cannabis businesses. The vote, which occurred on the popular cannabis holiday 4/20, received bipartisan support.
What would the SAFE Banking Act change?
The Secure and Fair Enforcement (SAFE) Banking Act is primarily designed to help businesses that work with Cannabis Delta-9-THC products in states where those products are legal. If passed by the U.S. Senate and signed into law by President Joe Biden, the SAFE Banking Act will minimize some of the barriers these business owners face when trying to access banking services.
Reuters reports that many of these businesses reportedly are forced to operate as cash-only businesses because many banks are unwilling to provide banking services to them. However, this bill could change that because it reportedly clarifies that the proceeds from these cannabis businesses are not illegal.
Hemp Industry Daily clarifies that hemp businesses do not face these same barriers. Hemp businesses reportedly have had full access to banking services since the 2018 Farm Bill made hemp a legal crop. However, Hemp Industry Daily reports that even some hemp businesses have had difficulty accessing all of the services that are supposedly available to them.
Why does this bill worry some hemp activists?
The SAFE Banking Act might make it easier for some businesses to access the banking services they need. This has many Delta-9-THC activists and hemp activists celebrating. However, some hemp activists are reportedly hoping that the U.S. Senate amends the bill before approving it.
Some hemp activists reportedly are concerned about a specific portion of the SAFE Banking Act that is intended to verify that hemp banking is already fully legal. According to Hemp Industry Daily, this section of the bill defines a “hemp-related legitimate business” as a business operating “in compliance with the 2018 Farm Bill.”
At first glance, this may not raise any red flags, but the issue is more complicated than it may initially appear to be. According the Hemp Industry Daily, “some states are either still in negotiations with the U.S. Department of Agriculture over compliance with the agency’s final hemp rules, or plan to retain pilot-project legal status as long as federal law allows.”
The bill's wording is also reportedly problematic because it only refers to hemp grown in the U.S. This could cause difficulties for U.S. businesses that import hemp from other countries.
Hemp activists are reportedly hoping that the Senate will amend the bill to ensure that no hemp businesses are unfairly impacted by the legislation’s clumsy wording.
“We just want to make sure it creates a hemp economy that works for everybody,” Larry Farnsworth told Hemp Industry Daily. Farnsworth is the spokesperson for the National Industrial Hemp Council.
What happens next?
The House’s recent approval represents the fourth time this governing body has voted to approve the SAFE Banking Act. Before being signed into law, the SAFE Banking Act must also pass in the U.S. Senate. In the past, this is where the legislation died, but many activists reportedly remain hopeful.
“Prospects for Senate passage are considered brighter than in previous years after Democrats won slim control of the upper chamber in the recent election,” reports Hemp Industry Daily.
It is unclear how quickly the Senate will begin considering the bill, and President Joe Biden has reportedly not yet indicated whether he will sign the bill into law or not. However, this could be an important piece of legislation for those in the hemp industry to keep an eye on.
Sources
[1] https://www.reuters.com/business/us-house-representatives-approves-cannabis-banking-bill-2021-04-19/
[2] https://hempindustrydaily.com/us-house-passes-marijuana-banking-reform-that-includes-hemp-provision/
