Lawmakers reintroduce SAFE Banking Act, a bill the cannabis industry hails as a lifeline
The SAFE Banking Act, which would allow banks to work with the cannabis industry without fear of federal prosecution, stalled in last year's congress.
Aaron Smith, Chief Executive Officer of the National Cannabis Industry Association speaks at a press conference about the Safe Banking Act in Washington D.C. on Wednesday, September 14, 2022.
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On Wednesday, a group of bipartisan legislators reintroduced in the House and Senate the Secure and Fair Enforcement Banking Act (SAFE), after the legislation intended to open up banking services to the cannabis industry had stalled during last year's Congress.
The bill was introduced by Rep. Dave Joyce (R-Ohio), Sen. Jeff Merkley (D-Ore. ), Sen. Steve Daines (R-Mont. ), and Rep. Earl Blumenauer (D-Ore.).
The Senate could vote for the first-time on critical financial and banking protections if they advance through the committees. The bill has been passed seven times in the House with strong bipartisan support.
Merkley stated in a press release that "for the first time we have a pathway for SAFE Banking" to pass through the Senate Banking Committee, and then be voted on by the Senate floor. "Let 2023 be the year we sign this bill into law, so that we can ensure all legal cannabis companies have access to financial services to help keep employees, businesses and communities safe."
Senate Majority leader Chuck Schumer (D-N.Y.) expressed his support on Thursday for the legislation and said that he would ensure the legislation included criminal justice provisions once it reached the floor.
Curaleaf Holdings Inc, Trulieve Cannabis Corp and Terrascend Corp were all up double-digits on Thursday. The reintroduction of the SAFE Banking Act, which was bipartisan in nature, appeared to give hope that more relief would be coming to the cannabis industry.
The SAFE Banking Act, which was reintroduced after its reintroduction, will provide relief for cannabis businesses of any size and serve as a step towards broader reforms, said Matt Darin. Matt Darin is the CEO of Curaleaf - a multistate cannabis operator.
Banks and credit unions are subject to federal prosecutions and penalties under current federal law if they offer services to legal cannabis companies. Cannabis is still classified as a Schedule I drug, which includes heroin and LSD. According to the federal Drug Enforcement Administration, Schedule I substances are drugs that have no accepted medical use but a high abuse potential.
State legal cannabis businesses that lack access to financial services are forced to run their business solely with cash. This can lead to robbery and money laundering as well as organized crime.
This legislation will save many lives and livelihoods. "It is time for Congress to address the irrational and unfair prohibition of basic banking service to state-legal marijuana businesses," said Blumenauer. Blumenauer is the founder and cochair of the Congressional Cannabis Caucus.
The bill includes key components that protect banks who work with cannabis businesses operating in states where it is legal from federal penalties.
According to the law, SAFE Banking prohibits federal regulators from taking punitive actions against banks.
This legislation creates an asset forfeiture safe harbor for bank officers, employees, and their officers. A new component is the safe harbor law, which extends to underserved community members who have difficulty accessing capital.
SAFE Banking will bring a boost to an industry in a slump. It has been co-sponsored by 38 senators and 8 members of the House. Since years, top cannabis executives have been pushing Congress to act on banking reforms and other federal regulations needed to strengthen their businesses.
Brady Cobb, CEO of Sunburn Cannabis - a major Florida dispensary chain - said in a press release that "all eyes should be focused on the Senate Banking Committee for the first Senate hearing."
He said that SAFE would serve as a springboard to allow the US banking sector and the financial industry to participate meaningfully in this growing industry. It will also reduce the safety risk faced by thousands of employees who work for this cash-only business.
Morgan Paxhia is the co-founder and managing Director of Poseidon, an investment firm that specializes in cannabis. He called the reintroduction of the measure a major advance for the industry.
Paxhia added, "We've seen many firsts when it comes to legal cannabis. This includes scheduling an hearing on cannabis banking reform at the Senate." This is a historic moment for the Senate.