House Passes Bill Allowing Marijuana Businesses Access to Banking
Up to now, dispensaries and other marijuana businesses have not had an easy time when it comes to banking, being limited to relying on a small handful of financial institutions or turning to a strictly cash only format. That’s all about to change, however, with the Secure and Fair Enforcement (S.A.F.E.) Banking Act of 2019, officially known as H.R. 1595. This bill offers protection to anyone involved in the cannabis industry, both banks and businesses. Dispensary owners will now have access to traditional banking services including loans and lines of credit, and banks are protected from prosecution for handling monies associated with cannabis-related businesses and transactions. The bill passed the House of Representatives in late September 2019, where it received overwhelming support.
Banks and credit unions have been wary of doing business with the cannabis industry due to the fact that marijuana remains illegal at the federal level, leaving financial institutions open to the possibility of prosecution. The SAFE Banking Act, however, will shield these institutions from consequences should they do business with legal cannabis businesses. Since a majority of states in America have legalized medical and/ or recreational marijuana, marijuana business banking access is good news for dispensaries across the nation.
Part of the argument presented on behalf of passing the bill was that businesses and their clients face a public safety hazard, as dispensaries, their employees and customers are targets for burglary due to the cash-only nature of most cannabis businesses. A 2016 incident in which a 24-year-old Marine veteran, Travis Mason, was shot and killed during the burglary of a dispensary in Denver was cited.
The next step is for the bill to go to the Senate, where odds of it passing are uncertain. Confidence among proponents of the bill is high, however, as nearly half of House Republicans supported the bill, and support from Democrats was almost unanimous. The bill was voted on under a procedure that allows measures that enjoy broad (but not unanimous) support to be voted on quickly. More than 200 lawmakers sponsored the bill at the time of the vote. The bill enjoys support from the American Bankers Association, the Independent Community Bankers of America, the Credit Union National Association, the National Association for State Treasurers, and governors of at least 20 states. President of the American Bankers Association Rob Nichols called the vote ‘a significant step forward for public safety, transparency, and common sense’.
Neal Levine, Chief Executive Office of the Cannabis Trade Federation, stated ‘We applaud the House for approving this bipartisan solution to the cannabis banking problem, and we hope the Senate will move quickly to do the same. This vital legislation will have an immediate and positive impact, not only on the state-legal cannabis industry, but also on the many communities across the nation that have opted to embrace the regulation of cannabis. Allowing lawful cannabis companies to access commercial banking services and end their reliance on cash will greatly improve public safety, increase transparency, and promote regulatory compliance’.
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