The bipartisan Secure and Fair Enforcement Banking Act (SAFE Banking Act) of 2021 is expected to get a vote today in the United States House of Representatives, a big development for the cannabis industry and the first step towards finally implementing a sensible federal cannabis policy. State-regulated cannabis businesses are severely hindered from a lack of access to bank accounts and other normal financial services. The extra burden especially hurts small businesses, complicates business relations with vendors, and creates a safety risk for staff, customers, and the local neighborhood. The cannabis industry got a big boost today, with the American Bankers Association urging Congress to pass the SAFE Banking Act, writing:
Since 1996, voters across the country have determined that it is appropriate to allow their citizens to use cannabis for medical purposes and, since 2012, for adult use. Currently, 36 states have legalized cannabis for medical or adult use and that number continues to grow. Nevertheless, current federal law prevents banks from safely banking cannabis businesses, as well as the ancillary businesses that provide them with goods and services.
As a result, a majority of states are struggling to address the significant challenges to public safety, as well as regulatory and tax compliance that go hand-in-hand with businesses forced to operate in an all-cash environment. Providing a mechanism for the cannabis industry to access the banking system would help those communities reduce cash-motivated crimes, increase the efficiency of tax collections, and improve the financial transparency of the cannabis industry. Since bank accounts are monitored in accordance with existing anti-money laundering and Bank Secrecy Act requirements, bringing cannabis-related legitimate businesses into the mainstream banking sector would also help law enforcement to identify suspicious transactions – an opportunity that is not available in an all-cash environment.
The ABA was joined by 51 state banking associations, who in a separate letter penned, noting that the “SAFE Banking Act is a banking-specific bipartisan solution that would address the reality of the current marketplace.” No matter anyone’s stance on cannabis legalization, and the ABA noted that they are neutral on the issue, they should support the SAFE Banking Act. Denying cannabis companies access to bank accounts leads unnecessary complications and danger for our local communities. Hopefully the House passes the common-sense legislation overwhelmingly and the Senate follows suit.