SAFER Banking Act Passes Senate Committee

The SAFER Banking Act has passed a critical Senate Committee hearing with a vote of 14-9. The renamed bipartisan bill would allow banks to work with cannabis businesses without penalties from the federal government.

The U.S. cannabis industry has long been waiting for SAFER Banking to pass the Senate. Alongside 280E tax burdens, the lack of access to essential banking services has unnecessarily handicapped the industry.

With SAFER Banking passing the Senate Committee on Banking, Housing and Urban Affairs, this marks the first time Senate members have voted in favour of cannabis banking reform. The House of Representatives has voted for the bill seven times before.

But now what? What’s the next step in reforming cannabis banking in the United States?

SAFER Banking Act – Steps After Passing the Senate Committee

While the SAFER Banking Act passing a Senate Committee is undoubtedly good news, it’s not the end of this lengthy saga.

After passing the Senate Committee, the SAFER Banking Act will head off to the Senate and the House for more debates, amendments, and votes. Assuming this goes smoothly, the bill will eventually land on the President’s desk, where everyone expects him to sign it.

The recent Senate Committee vote clears the path for the bill to make it to the Senate floor. Passing the bill would mean cannabis businesses in legal states would no longer have to operate as cash-only enterprises. Handling massive amounts of money in cash is inconvenient but also dangerous. Cannabis operators have been vulnerable to theft and fraud.

Hence, industry stakeholders applaud the Senate Committee for decisively voting for SAFER Banking.

 “[It’s] a historic step towards final passage of a critical policy building block for the cannabis industry,” said Minority Cannabis Business Association (MCBA) President Kaliko Castille.

MCBA has been committed to ensuring that the House and Senate not only pass the SAFER Banking Act but also contain provisions to aid minority entrepreneurs who have been the primary targets of the drug war.

“The committee’s approval of the SAFER Banking Act gives hope to thousands of compliant, tax-paying businesses desperately trying to access the basic financial services other businesses take for granted,” said National Cannabis Industry Association CEO Aaron Smith. “This uniquely bipartisan legislation has the potential to save lives and help small businesses; it’s time for Congress to get it to the president’s desk without further delay.”

What Next?

The Senate Committee’s passing of the SAFER Banking Act may have been influenced by recent cannabis news coming from Washington, D.C.

Earlier this month, the Department of Health and Human Services officially recommended that the DEA move cannabis from Schedule I to Schedule III in the federal Controlled Substances Act.

That change wouldn’t affect banking, but it would relieve operators of the burdensome 280E tax. The potential rescheduling gave a shot in the arm to pot stocks. Perhaps it also lit a fire under the butts of American Senators.

SAFER Banking would give the U.S. cannabis industry better access to financial services, including depository services, electronic payments, lending, and other access to capital. 

Even Canadian cannabis companies will benefit from banking reform in the U.S. Currently, Canadian banks take the same drug-war mentality despite the herb’s legal status north of the 49th. Canada’s oligarch banks have a significant presence in the American economy that they don’t want to compromise.

Advocates are hopeful the Senate will eventually pass the SAFER Banking Act, as it has bipartisan support among Republicans and Democrats.

The United States has legal cannabis in 23 states, the District of Columbia and two territories. Every state has a medical cannabis program except Idaho, Wyoming, Kansas, and South Carolina.

Three in four Americans live in a legal cannabis state. At this point, federal cannabis legalization seems less of a question of “if” and more of a matter of when.