House looks set to approve cannabis banking bill, Senate approval could be difficult

Financial firms that deal primarily with the hemp industry also stand to be protected by the SAFE Banking Act

Bethan Rose Jenkins, Cannabis News Writer/Editorial

Less than a week ago, the Democratic-steered House of Representatives voted in favor of a bill’s passing that would safeguard banking institutions involved in the cannabis industry.

This is a victorious moment for licensed cannabis business owners, who have been left with no option but to operate in cash. With thousands of dollars’ worth of cash stuffing dispensary tills every single day, cannabis businesses are susceptible to thefts and break-ins.

Although the passing of the bill – called the “Secure And Fair Enforcement (SAFE) Banking Act” – is a positive indication of the cannabis banking landscape smoothing out in the near future, industry analysts caution business owners that it is unlikely to be enacted into law this year. 

The SAFE Banking Act is sure to stumble when it is put in front of the Republican-controlled Senate. Cannabis industry analyst from Capital Alpha Partners, Ian Katz, claims that the chances of the cannabis banking bill being enacted before 2019 is over have now shrunk from one in three to one in five.

We remain skeptical for now,” Katz announced in a public statement prior to the House vote commencing. He believes that the odds will improve if the Senate hints about cannabis reform over the next few weeks.

What is the purpose of the SAFE Banking Act?

The sole purpose of the SAFE Banking Act is to clarify the rules pertaining to the ways in which banking institutions and credit unions can conduct business transactions with cannabis companies.

Although a number of financial institutions are already collaborating with companies in the legal cannabis space, they run the risk of facing legal repercussions for doing so. The rule applies even for licensed cannabis companies, due to the fact that the cannabis plant remains a Schedule I drug under the Controlled Substances Act.

Financial firms that deal primarily with the hemp industry also stand to be protected by the SAFE Banking Act. Senate Majority Leader Mitch McConnell’s home state of Kentucky is heavily involved in the hemp industry, but his disapproval of cannabis may cause the bill to stumble in the Senate.

McConnell says he has no plans to support the cannabis plant’s “illicit cousin,” which he says he chooses “not to embrace.”

SAFE Banking Act received opposition from critical groups

Not everyone is in favor of the SAFE Banking Act, with a number of progressive groups opposing the idea. The American Civil Liberties Union and the Center for American Progress are two examples of groups who do not think that cannabis banking should be permitted. They aired their opinions ahead of the House vote that recently took place.

Democratic House leaders received a letter from groups in opposition to the SAFE Banking Act, claiming that committees worst affected by cannabis prohibition will not benefit from the new law going into effect. Members of the progressive groups claim that communities inflicted by prohibition have been “shut out” of the industry, which is expected to pull in $30 billion in sales in the U.S. by the year 2023.

Nonetheless, the House decided to pass the measure anyways.