Legislation that would give the legal cannabis industry access to traditional banking services will not be included as part of an omnibus spending bill expected to be passed this week, according to sources in the U.S. Senate and the House of Representatives.
House and Senate sources
Under the SAFE Banking Act, federal banking regulators would be prohibited from penalizing banks that choose to serve cannabis firms doing business in accordance with state law. Under current regulations, financial institutions are subject to penalties under federal money laundering and other laws for servicing such companies, leaving the cannabis industry to operate in a risky environment heavy in cash. The legislation was initially introduced in the House in 2013 by Democratic Rep. Ed Perlmutter of Colorado, who has reintroduced the bill each subsequent congressional cycle.
The SAFE Banking Act was passed by the House of Representatives in 2019 and again in 2020 as part of a COVID-19 pandemic relief bill. Since then, the provisions of the legislation have been passed by the House five more times, as either a standalone measure or a part of other bills.
Most recently, Democrats had hoped to include the SAFE Banking Act language in a defense spending bill considered by Congress earlier this month. But so far, the Senate has failed to bring the cannabis banking bill up for a vote.
SAFE Banking Act Last-Ditch Effort Unsuccessful
The failure to include cannabis banking provisions in the spending bill comes despite what
“The failure to pass my bipartisan ‘SAFE Banking Act’ means communities in Montana and across our country will remain vulnerable to crime where legal businesses are forced to operate in all-cash,”
Erik Altieri, the executive director of the National Organization for the Reform of Marijuana Laws (NORML), said that “Democrats have promised action on cannabis consistently for the last two years, yet leadership consistently failed to prioritize and advance marijuana reform legislation, including legislation to provide clarity to banks and to provide grant funding for state-level expungements efforts, despite having several opportunities to do so.”
“Democrats’ failure and the GOP’s continued resistance to any progress is out of step with voters’ opinion, is bad politics, and most importantly, it is bad public policy,” Altieri added in a statement from the cannabis reform advocacy group. “Until Congressional action is taken, state-licensed marijuana businesses, the hundreds of thousands of people they employ, and the millions of Americans that patronize them will continue to be at a higher risk of robbery due to the cash-heavy nature of this industry created by outdated federal laws. Furthermore, smaller entrepreneurs who seek to enter this industry will continue to struggle to compete against larger, more well-capitalized interests.”
Women Grow President Gia Morón sent a statement via email about the exclusion of the SAFE Banking Act. However, she remains unwaveringly focused on advocacy. “While we are disappointed SAFE was not included, we are not discouraged. There is more work to do,” she said. “We will continue to advocate for a banking system that will support small equity-focused businesses. We will use this time to reset and begin our work again in the new year.”
The SAFE Banking Act could still be passed as a standalone bill as the current lame-duck session of Congress comes to a close. But with only days left in the legislative session, the prospects of passage appear unlikely.