The legalization of marijuana for medical and recreational use has led to a booming industry, with billions of dollars being spent on cannabis products.
However, due to federal restrictions, many financial institutions have been hesitant to provide services to cannabis businesses. This has posed significant challenges for the industry, including issues with handling large amounts of cash and limited access to basic banking services.
As a result, there has been a push for banking reform in the cannabis industry, particularly through the introduction of The Secure and Fair Enforcement Regulation Banking Act (SAFER) Banking Act. This proposed legislation would allow financial institutions to provide services to marijuana-related businesses without fear of federal prosecution.
However, it is interesting to note that some unexpected players have joined the lobbying efforts for this bill, including Bank of America, Mastercard, and the National Rifle Association (NRA), per CannabisWire.
These companies, which have previously denied bank accounts and credit cards to cannabis businesses, are now advocating for the passage of banking reform that would allow them to do business with this controversial industry. This unlikely partnership raises questions about their motives and potential impact on the future of marijuana banking reforms.
The SAFER Banking Act
The Secure and Fair Enforcement Regulation Banking Act (SAFER) Banking Act was introduced as a response to the banking challenges faced by the cannabis industry. The bill aims to provide legal cannabis businesses with access to basic banking services, such as checking accounts and loans, without fear of federal prosecution. This would be achieved by prohibiting federal regulators from taking any adverse action against financial institutions for providing services to state-legal cannabis businesses.
Its original version, known as the SAFE Banking Act (Secure and Fair Enforcement Act), passed the House seven times with bipartisan support. However, it has yet to be taken up for a vote in the Senate. This changed in late September when the Senate Banking Committee approved the bill, marking a significant step towards its passage through Congress. The bill now awaits a vote in the full Senate.
If passed, the SAFER Banking Act has the potential to greatly benefit the cannabis industry by providing access to vital financial services. It would also address safety concerns related to handling large amounts of cash and promote transparency in financial transactions within the industry.
Tides Turning?
In the past, companies like Bank of America and Mastercard have been known for their strict policies against providing services to cannabis businesses due to federal restrictions. However, with more states legalizing marijuana and public support for legalization growing, it seems that these companies are starting to shift their stance.
One possible reason for this change could be the potential financial benefits of doing business with the cannabis industry. With billions of dollars being spent on cannabis products, it is a lucrative market that these companies don’t want to miss out on. Additionally, as public opinion and state laws continue to evolve, it may no longer make sense for them to hold onto outdated policies.
Furthermore, the NRA’s involvement in lobbying for marijuana banking reforms raises questions about their motives and potential impact on the bill. For a traditionally conservative organization to support such a controversial issue as marijuana reform is significant and may indicate a shift towards more progressive views. Has the tides turned?
Bank Of America, The NRA, and Mastercard Support for Marijuana Banking?
Both Bank of America and the NRA have disclosed lobbying efforts related to S.2860, or the SAFER Banking Act, in their respective filings with the Senate Office of Public Records. However, it is important to note that these disclosures do not specify whether they are advocating for or against the bill.
In the Lobby Activity section of Bank America’s disclosure, it lists S.2860 “S 2860, SAFER Banking Act, issues related to the provision of financial services; General issues related to CFPB credit card late fees NPRM and other banking fees.”
The stance on cannabis from Bank of America is somewhat murky, it is well known they large banks will shut down personal accounts immediately if found to be used in cannabis activity because of the federal illegality of the plant.
In 2021, they informed Scottsdale Research Institute a federally approved research center, that it would be closing its bank accounts with the company, without a clear reason per Marijuana Moment.
Despite its previous reluctance to provide financial services to cannabis businesses, Bank of America has shown interest in the industry through its involvement in equity research and securing funding for Canadian marijuana companies in 2019.
While Bank of America’s involvement in the marijuana industry has been more visible, the NRA’s stance on cannabis is less clear. The organization has not taken an official position on cannabis legalization, although it has a history of opposing stricter drug laws and supports state rights to decide on marijuana policies. In the quarter 3 NRA lobbying disclosure, it lists S.2860 as one of the many legislatures it provided funding for.
However, David Keene, former NRA president wrote in a 2018 Washington Times op-ed
“The refusal of the federal government to accede to the judgment of the states on the issue has created problems for tens or even hundreds of thousands of gun owners who are being forced to either trade their Second Amendment rights for a chance to live pain-free or risk prosecution and imprisonment,”
While some former NRA members may have supported state rights to decide on marijuana policies in the past, their current actions suggest a different stance. In recent years, the organization has been largely silent on protecting cannabis users’ Second Amendment rights.
Mastercard has also started to lobby for the SAFER Banking Act according to CannabisWire.
Mastercard’s involvement in the cannabis industry has been a rollercoaster of sorts. In 2019 and 2020, the company was actively lobbying for marijuana banking legislation, but then seemingly stopped until recently when it resumed its efforts for the SAFER Banking Act.
In July this year, Mastercard made headlines when it requested that financial institutions stop processing marijuana transactions via PIN debit cards. This move was seen as a setback for the cannabis industry, as it limited convenient payment options for consumers and forced them to rely on cash purchases instead.
It remains to be seen where these organizations stand in regards to the SAFER Banking Act. Are they trying to stifle its progress, or are they jumping on the bandwagon early as it gains momentum?
Regardless of their intentions, one thing is for certain: the passing of this bill would be a major victory for the cannabis industry. It would remove a major obstacle that has hindered its growth and development for years.
As advocates for cannabis reform, we at Beard Bros support the continued advancement and eventual passing of the SAFER Banking Act so that cannabis businesses can operate like any other legitimate industry. In an ever-changing landscape where companies and organizations may have conflicting interests, it is crucial for us to remain informed and continue advocating for positive change within the cannabis industry.
So let us continue to watch and support the progress of this bill, as it has the potential to benefit not only businesses but also consumers and patients who rely on safe and convenient access to cannabis products.
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