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SAFE Banking Act Headed to Senate for a Historic Vote

The measure designed to give cannabis businesses access to banking and financial services may finally have a chance to make it to President Biden’s desk for approval.

Despite a disappointing attempt and failure to pass common-sense finance reform for the marijuana industry via the SAFE (Secure and Fair Enforcement) Banking Act last year, leaders in the U.S. House and Senate are once again trying to enact the legislation which would allow cannabis businesses to use banking services, including loans. According to numerous media outlets, a group of bipartisan lawmakers reintroduced the bill in both chambers of Congress this past Wednesday hoping that this attempt might be the one to succeed.


Because cannabis is still listed as a Schedule 1 narcotic under the Controlled Substances Act, making it illegal at the federal level, current rules make it a federal crime for banks and other financial institutions to provide services to marijuana businesses. As a result, even though close to 40 states legally allow cannabis products, banks face the significant threat of having their deposit insurance discontinued or limited and potential criminal prosecution if they allow cannabis companies access to their financial services.


The revised version of the bill, which has received several tweaks, was brought before the House and Senate this week by Sen. Jeff Merkley, D-Ore., Sen. Steve Daines, R-Mont., Rep. Dave Joyce, R-Ohio, and Rep. Earl Blumenauer, D-Ore. Throughout its legislative history, the measure has enjoyed substantial bipartisan support.


Having passed seven times in the House previously, the bill seemed to always stall out in the Senate. However, this time, if the legislation makes it out of the Senate Finance Committee, it will head to the full Senate for a potentially historic and massively anticipated first vote.


Sen. Merkley said in a statement, “For the first time, we have a path for SAFE Banking to move through the Senate Banking Committee and get a vote on the floor of the Senate. Let’s make 2023 the year that we get this bill signed into law so we can ensure that all legal cannabis businesses have access to the financial services they need to help keep their employees, their businesses, and their communities safe.”


"For the first time, we have a path for SAFE Banking to move through the Senate Banking Committee and get a vote on the floor of the Senate. Let’s make 2023 the year that we get this bill signed into law so we can ensure that all legal cannabis businesses have access to the financial services they need to help keep their employees, their businesses, and their communities safe.”

- Sen. Jeff Merkley, D-Ore


Another aligned market that is eagerly monitoring the SAFE Act’s new path is the hemp industry. Since the passage of the 2018 Farm Bill, which made hemp cultivation and hemp-based products legal, businesses in that sector have been eligible to work with banking institutions to set up bank accounts and receive loans. However, because of the confusion over the differences between hemp and cannabis, many hemp companies are denied financial services for fear of federal prosecution. The passage of the SAFE Act would remove those barriers.


The legislation would also help address a real and dire public safety threat. Because many of these companies cannot access the most basic banking services, they must operate a heavy cash-based business model. This reality has led to a massive spike in robberies, money laundering, and organized crime activity. The SAFE Act will protect human beings and taxpayer dollars against the dark and seedy consequences of the ever-present marijuana black market.


Rep. Blumenauer, Founder and Co-Chair of the Congressional Cannabis Caucus expressed that sentiment by saying, “This legislation will save lives and livelihoods. It is past time that Congress addresses the irrational, unfair, and unsafe prohibition of basic banking services to state-legal cannabis businesses.”


"This legislation will save lives and livelihoods. It is past time that Congress addresses the irrational, unfair, and unsafe prohibition of basic banking services to state-legal cannabis businesses.”

- Rep. Earl Blumenauer, D-Ore


Prominent members of the Senate, including Senate Majority Leader Chuck Schumer, D-N.Y., have expressed strong support for the bill. On Thursday, Schumer also pledged to ensure the measure includes criminal justice provisions before it reaches the Senate floor.


Under the revised version of the SAFE ACT, federal regulators will be barred from taking punitive steps against banks. Those include:

  • Prohibiting, penalizing, or discouraging a bank from providing financial services to legal cannabis companies

  • Ending or limiting an institution’s federal deposit insurance should it provide such services

  • Recommending or incentivizing a bank to terminate or downgrade services to a cannabis business

  • Taking any action on a loan to an owner or operator of a cannabis business

The resuscitation of the SAFE Act comes as welcome news to an industry suffering from a significant economic contraction over the past few years. Top stakeholders and advocates within the cannabis sector have been pleading with Congress for years to enact legislation like SAFE and others to help bolster the industry.


In a statement, Brady Cobb, CEO of Sunburn Cannabis, a leading Florida dispensary chain, said, “All eyes should be on the Senate Banking Committee to call the measure up for its first hearing in the Senate. SAFE will serve as a springboard for the US banking and financial sectors to meaningfully participate in this budding industry, and most importantly, it will significantly reduce the safety risks faced by the thousands of employees of this all-cash business.”


"All eyes should be on the Senate Banking Committee to call the measure up for its first hearing in the Senate. SAFE will serve as a springboard for the US banking and financial sectors to meaningfully participate in this budding industry, and most importantly, it will significantly reduce the safety risks faced by the thousands of employees of this all-cash business.”

- Brady Cobb, CEO of Sunburn Cannabis


This renewed effort by Congress to inject a much-needed jolt of financial and regulatory energy into the reeling marijuana business world is a positive and potentially life-saving step in the right direction. As more and more states establish medical cannabis programs and legalize adult-use marijuana, sound, accessible, and safe financial services will serve as the lifeblood for future growth and expansion in an industry too vital to ignore or fail.



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