On Wednesday, Congress saw the reintroduction of the Secure and Fair Enforcement or SAFE Banking Act by bipartisan lawmakers in both chambers. This new legislation aims to normalize banking and financial services for legal cannabis businesses.
The SAFE Banking Act is sponsored by Sens. Steve Daines (R-MT) and Jeff Merkley (D-OR) in the Senate and Reps. Earl Blumenauer (D-OR) and Dave Joyce (R-OH) in the House. It would protect banks and other institutions against federal prosecution when they serve state-legal cannabis companies. The first version of the SAFE Banking Act was introduced in 2019 but did not pass due to opposition from some congressional members.
This time, the updated bill has been modified to include additional protections for financial institutions serving cannabis businesses. These changes have given lawmakers more confidence in the legislation and increased its chances of success this time around.
The updated SAFE Banking Act would protect financial institutions from federal penalties for providing banking services to cannabis companies that are licensed and regulated by states. It would also provide additional protections, such as ensuring financial institutions do not face discrimination based on their participation in the cannabis industry, requiring greater transparency of cannabis businesses through bank accounts and records, and prohibiting co-mingling of proceeds generated from illegal activity with funds related to legal activity.
Operating an all-cash business presents significant safety risks to cannabis businesses, their customers, and their employees. Large amounts of cash can make a business a target for criminals looking to steal money or property — leaving businesses vulnerable and exposed.
If passed, this legislation would provide much-needed clarity and security to an industry that has been struggling to access basic banking services due to conflicting laws at the federal level. In addition, the SAFE Banking Act could simplify the tax process for cannabis businesses by allowing them to use electronic payments and provide financial transparency of the industry through bank accounts and records — ultimately helping the industry operate more efficiently.
Ultimately, the SAFE Banking Act could be a game changer for the legal cannabis industry. If passed, it would provide much-needed clarity and security by giving financial institutions access to services such as loans, lines of credit, and checking accounts — while helping reduce criminal activity and improve safety for customers and employees.
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