Marijuana Banking Bill: New Boost for Cannabis in the U.S.

Senate to the SAFER Banking Act, popularly known as the “Marijuana Banking bill”, whose approval would be a great boost for the growth of the sector.

The new bill could be a game-changer for the U.S. cannabis sector. The current federal legal framework in the United States does not allow cannabis companies to access basic banking services, raising risks and limiting their growth. The bill, known as the Secure and Fair Enforcement Regulation (SAFER) Banking Act, would allow companies to operate on a level playing field with other industries, facilitating their growth and recognizing the legitimacy and economic contribution of the sector.

Following its approval by the House of Representatives and the green light from the Senate Committee, the SAFER Act is expected to be approved by the Senate soon.

Background

In recent years, 21 states and Washington, D.C. have legalized the recreational use of cannabis for adults, and 37 states have implemented medical marijuana programs.

Although cannabis is legal in many states, federal regulation has been an obstacle, restricting the industry’s access to basic financial tools for growth and security.

Under current federal regulatory restrictions, cannabis businesses cannot access financial tools such as bank accounts, deposits or basic necessities such as point-of-sale (POS) terminals to accept credit card payments. Due to these restrictions, companies have to manage their operations in cash only, increasing the security risks for owners, employees and customers, and the potential complications involved.

Previous versions of this proposal have already been approved by the House of Representatives up to seven times. However, it had never advanced in the Senate.

U.S. Senate SAFER Act moves forward: Cannabis banking on the horizon

Yesterday, September 27, the Senate committee gave the bill the green light to continue its legislative process, but it must still be approved by the full Senate.

Details of the bill

The SAFER Banking Act seeks to remove banking barriers for cannabis businesses by providing them with a clear legal framework.

The essence of the project seeks to provide security to these companies, recognizing the legitimacy and economic contribution of the sector, facilitating their access to banking services.

The bill is the result of months of negotiations and has been introduced jointly by Republican, Democratic and Independent Sens: Jeff Merkley (D-Ore.), Steve Daines (R-Mont.), Kyrsten Sinema (I-Ariz.), Cynthia Lummis (R-Wyo.) and Majority Leader Chuck Schumer (D-N.Y.).

The SAFER Banking Act will provide a safe harbor for state-level legal marijuana dispensaries and growers to access federally regulated banks and credit unions, which until now have been reluctant to collaborate with these businesses due to lingering federal prohibition.

Among the most important modifications, the project will allow these companies to access regulated banking services, establishing uniform guidelines, and to protect their financial rights. The law will prohibit closing bank accounts of cannabis companies “without good cause,” and will protect employees of these companies when applying for mortgages backed by federal programs. The proposal also “suggests” that banks not deny financial services to cannabis companies based on personal beliefs or political motivations, and urges the U.S. Treasury’s Financial Crimes Enforcement Network to update its guidelines on banking services for the cannabis industry within six months.

Another important fact to note is that, this time, the bill comes three weeks after the Biden administration’s recommendation to reclassify marijuana under federal drug laws. The DEA (“Drug Enforcement Administration”) is expected to change the legal classification of marijuana from Schedule I (substances with no accepted medical use and high potential for abuse) to Schedule III, which would imply a change in the legal and medical perception of marijuana and pave the way for the approval of the new law.

By reclassifying marijuana to Annex III, the medicinal use of cannabis and its lower potential for abuse compared to Annex I and II substances is recognized. This change would facilitate medical cannabis research, as well as the regulation of cannabis-related activities in the country in general, including the current SAFER Banking Act bill.

SAFER Act aims at a financial revolution in the cannabis sector

The proposal is viewed with enthusiasm and as a necessary response to a problem that has limited the industry’s potential for growth and expansion. The SAFER Banking Act has the potential to transform the cannabis industry, providing financial security and promoting its growth in the US. If passed by the full Senate, this bill will further energize the cannabis-related economy across the country.