U.S. Senate revives cannabis banking reform effort

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Bethan Rose Jenkins, Cannabis News Writer/Editorial

Just one week after the U.S. House of Representatives reintroduced a chunk of pro-cannabis banking legislation, a corresponding bipartisan measure gained some traction in the Senate. 

Cannabis industry advocates rejoiced upon hearing the news that Senators Jeff Merkley, a Democrat from Oregon, and Steve Daines, a Republican from Montana, had reintroduced the Senate to the Secure and Fair Enforcement (SAFE) Banking Act, alongside 27 co-sponsors.

Financial institutions that are considering working with state-legal cannabis companies can gain protection from the bill, which would safeguard cannabis-related transactions in spite of the plant’s federally illegal status.

The SAFE Banking Act was passed by the House in 2019

In 2019, a bipartisan vote of 321-103 saw the SAFE Banking Act gain approval in the House. Unfortunately, the measure failed to build enough traction to pass in the Senate. 

With just a portion of Congress supporting the bill in the previous legislative cycle, it was imperative that SAFE be reintroduced this year for it to have a chance of being enacted into law amid the two-year legislative session, which commenced in January.

“At a time when small businesses need all the support they can get, and after cannabis businesses specifically have been providing essential services and generating significant tax revenues for states and the federal government with little to no financial relief, it is more imperative than ever to get the SAFE Banking Act passed into law,” said CEO of the National Cannabis Industry Association, Aaron Smith, in an official statement.

“Lack of access to banking services continues to create serious unnecessary issues for public safety, transparency, and access to traditional lending that smaller operators desperately need.”

The House also passed SAFE Banking Act in 2020

Last year, the SAFE Banking Act managed to gain a bipartisan majority. Sadly, the measure stumbled in the Senate which, at the time, was led by Majority Leader Mitch McConnell. The turnout was unsurprising, considering the fact that McConnell is renowned for being overly prohibitionist in his reform efforts.

Senate Republicans have embraced cannabis banking reform more openly than some other more comprehensive measures, including the descheduling of cannabis. Notwithstanding this fact, the SAFE Banking Act may still face some roadblocks. Senate bills must garner 60 votes to pass.

Thankfully, there’s a silver lining. Since Congress is now dominated by Democrats, there’s a good chance that the bill will gain approval this year. Failing this, only federal legislation will resolve the issue of cannabis banking.