The landscape of legal weed in the United States looks set to undergo major metamorphosis in the near future. Amid congressional consideration of the SAFE Banking Act and CLAIM Acts, cannabis-focused businesses and the industry at large stands to experience rapid change.

Both chunks of landmark legislation could transform the outlook for cannabis reform, insurance rights and federal cannabis banking. This is a significant first step for helping cannabis businesses conduct more legitimate and safe operations.

Banks and credit unions, in the fear of being penalized, have long been left feeling overly standoffish to the prospect of assisting businesses in the cannabis industry. As a result of this, many cannabis business owners have been forced to conduct cash-only transactions. Consequently, such businesses are often targeted by criminals.

Fortunately, there’s a silver lining. The House-approved Secure and Fair Enforcement Banking Act (SAFE) would enable financial institutions to do business with companies in the cannabis space, minus the risk of facing federal penalties. 

Since being passed in the House, proponents are optimistic that it will fly through the Senate and make its way to President Biden’s desk for consideration.

Then there’s The Clarifying Law Around Insurance of Marijuana (CLAIM) Act, which was put forward in Congress this past March. Currently, it remains in the first stage of the legislative process.

Should the CLAIM Act be given the green light, insurance companies would be legally allowed to service cannabis businesses without the threat of federal penalties.

The SAFE Banking Act: Offering cannabis companies access to banking and loans

As of May 18, 2021, 36 U.S. states and four U.S. territories permit the use of medical cannabis products. On the recreational end of the scale, 17 U.S. states, two territories and the District of Columbia have introduced legislation to regulate cannabis for adult-use purposes.

With the rise of legislation comes the pressing need to legalize cannabis. The SAFE Banking Act’s House approval is a good step forward. The Act offers banks and credit unions protection so that they would not be liable for serving cannabis-related business with financial services. More competition means greater capacity and lower premiums for all. 

The SAFE Act would prevent a federal banking regulator from doing the following:

• Influencing a depository institution to reject their financial services to an account holder who is associated with a cannabis-focused business.
• Restricting or terminating the share insurance or deposit insurance of a depository institution merely because the institution serves a cannabis-focused business.
• Taking negative supervisory action on a financial loan because the recipient owns a business, or business-related equipment and/or real estate.

The CLAIM Act: Supporting cannabis businesses with adequate insurance coverage

If the CLAIM Act is strong enough to pass, it will safeguard insurance companies that offer coverage plans to regulated and state-sanctioned cannabis companies. Moreover, the Act would stop the federal government from cancelling a cannabis company’s insurance policy and shield broker employers from being held accountable for supporting a cannabis-related business.

The CLAIM Act is expected to be a major boost for the nation’s insurance market, which could encourage insurance firms to ink cannabis policies. In the event that the Act is approved and effectuated, greater competition will equate to more capacity and reduced premiums for everyone involved.

Two U.S. House Republicans introduce federal cannabis legalization bill 

Meanwhile, two Republican congressmen in the U.S. House of Representatives recently put forward legislation to legalize the plant at the federal level; similarly to alcohol. 

The bill, titled, “Common Sense Cannabis Reform for Veterans, Small Businesses, and Medical Professionals Act,” has received sponsorship from Reps. David Joyce of Ohio and Don Young of Alaska.

Co-chairs of the bipartisan Congressional Cannabis Caucus, the two congressmen sponsored the bill alongside Democrats Earl Blumenauer of Oregon and Barbara Lee of California.

As per terms of the measure, cannabis would effectively be eliminated from the federal Controlled Substances Act. Moreover, it would grant banking protections for the cannabis industry at large and increase military veteran access to state-legal medical cannabis programs. Research efforts would also experience a significant boost.