The SAFE Cannabis Banking Act Gets a Revival

The third time could be a charm for the SAFE Banking Act, following the reintroduction of the bill into the House of Representatives.

The Secure and Fair Enforcement (SAFE) Banking act is back on the table after two prior rejections, and may finally get its chance to shine.

The SAFE Banking Act seeks to provide protection for financial institutions that choose to provide loans to cannabis businesses in states where the plant is legal, effectively opening the floodgates for cannabis companies to gain access to loans, as well as handling their cash through banks rather than in paper form.

Despite being legal in 35 U.S. states, the federal illegality of cannabis makes it a touchy subject for banks, which risk being charged with aiding and abetting a federal crime if they come into contact with the plant.

This has left the cannabis industry virtually unable to deal with banks, with many stores requiring that shoppers pay in cash. And, given that cannabis remains a fledgling industry, an inability to access funding adds an extra strain upon companies hoping to survive in an already difficult space.

Initially, the SAFE Banking Act passed House of Representatives in 2019, before being rejected by Senate Republicans, led by Mitch McConnell who is an ardent opposer of cannabis legalization. The banking act was then reintroduced as part of the initial COVID-19 relief bill, only to be then perceived as unnecessary by critics and promptly abandoned.

This was despite the fact that cannabis dispensaries were deemed to be "essential" during the COVID-19 pandemic, and were a massive cash cow for states that had legalized the plant.

Now, the reintroduction of the bill comes on the heels of a second stimulus payment having just been sent out to U.S. citizens, and amid full Democrat control of all branches of government; the House of Representatives, the Senate, and the Presidency.

Having said that, the reintroduction of the bill also follows news that the Biden Administration recently fired staffers for having consumed cannabis in the past – a move that quickly brought the industry's expectations of Biden's marijuana policy down to earth.

Passage of the SAFE Banking Act would allow companies to access capital and insurance, which would not only assist them financially but also would alleviate security concerns, as some dispensaries have to carry significant amounts of cash and are prime targets for burglary as a result. Currently, cannabis dispensaries have to resort to using armed security to protect their capital, which itself is costly.

So, could the third time be the charm for the SAFE Banking Act? Only time will tell.

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Louis O'Neill
Louis O'Neill

Louis is a writer based in Sydney with a focus on social and political issues. Having interviewed local politicians and entrepreneurs, Louis now focuses on cannabis culture, legislation & reform.