Cannabis businesses struggling under the weight of a cash-only system may soon see relief as the SAFE Banking Act makes its way through Congressional committees.
The most recent version of the SAFE Banking Act was approved by the House Financial Services Committee in late March after being reintroduced this year by a bi-partisan team of representatives: Reps. Warren Davidson (R-OH), Denny Heck (D-WA), Ed Perlmutter (D-CO), and Steve Stivers (R-OH). The goal of the bill is to allow banks to work with cannabis-related businesses (in regulated states) without fear of penalties from federal banking regulators.
Not only are the introducers of this bill bipartisan, but the SAFE Banking Act is breaking records for support in the House of Representatives. Over 160 co-sponsors have signed on, which is nearly a third of the total House seats. That’s more support than any other cannabis legislation has garnered.
The Senate has also created a companion bill that has growing support. Reintroduced by Senators Cory Gardner (R-CO) and Jeff Merkley (D-OR), the bill has 20 cosponsors and opens many of the same doors that the House bill does.
For a bill to become law, the House and the Senate must both approve the bill after committees have reviewed it and after it gets on the calendar for discussion. If the House and Senate approve different versions, the bill must go to the Conference Committee to reconcile the differences and create one single bill. That revamped bill is then sent back to the House and Senate. If both approve, the bill goes before the president, who can either choose to approve it or veto it.
Strong support for banking reform
This bill has bipartisan support because it doesn’t take a certain political ideology to recognize the inherent safety and logistical issues that a cash-only system creates in this modern era. Cannabis businesses and the businesses that serve them will be safer, more secure, and able to utilize basic financial services that entrepreneurs in other industries take for granted.
Being able to work with banks not only helps big cannabis businesses, who need more cash storage and money management, but also small start-ups who won’t need to rely solely on venture capitalists (and the demands and fine print that come with them) to get a new venture up and running.
This kind of legislation is the only solution to the problem currently facing banks and the businesses who so desperately would like to be their customers. Treasure Secretary Steve Mnuchin said at the April 9 House appropriations subcommittee hearing that there is “not a Treasury solution to this.”
“There is not a regulator solution to this,” Mnuchin told the subcommittee. “If this is something that Congress wants to look at on a bipartisan basis, I’d encourage you to do this. This is something where there is a conflict between federal and state law that we and the regulators have no way of dealing with.”
While the SAFE Banking Act doesn’t end federal prohibition, passing it would officially recognize the right of the states to regulate cannabis in their borders. That has never happened before, and the fact that these two companion bills have record-breaking support for cannabis legislation in Congress means that this is more likely than ever to pass this year. A lot could happen this year, so keep an eye on the SAFE Banking Act to see what opens up for the cannabis industry in 2019.