More than a year after it was first introduced, the SAFE Banking Act has hit another wall, once again leaving cannabis businesses and financial institutions out in the cold.
Originally, the SAFE Banking Act was intended to be included in the America COMPETES Act but has since been left out of the bill, despite being included in the House’s version of the bill. And while Perlmutter has promised that he will continue to fight to have the SAFE Banking Act passed, another new bill has been filed by Rep. Troy Carter (D-LA): The CLIMB Act.
The SAFE Banking Act
In March of 2021, Rep. Ed Perlmutter (D-CO) introduced and sponsored the SAFE Banking Act – or the Secure and Fair Enforcement Banking Act – in an attempt to keep marijuana business owners safe and allow them the same banking advantages as other non-cannabis-related businesses.
The importance of this bill is due to the fact that, as it stands, with cannabis still being illegal on a federal level, financial institutions are wary of doing business with canna-businesses for fear of being targeted for associating with those engaging in “illegal” businesses. Without the ability to use financial institutions for their company’s banking transactions, cannabis business owners are left to deal in cash only, which ultimately turns them into open targets for robberies and the like.
“The Senate continues to ignore the public safety risk of forcing cannabis businesses to deal in all cash. In the wake of the Senate’s inaction, people continue to be killed, businesses continue to be robbed, and employees and business owners in the cannabis industry continue to be excluded from the financial system,” said Rep. Perlmutter in a statement, according to MJBizDaily.
The SAFE Banking Act would prohibit “a federal banking regulator from penalizing a depository institution for providing banking services to a legitimate cannabis-related business,” the Bill states. The original summary of the act, found on the Congress website, goes on to say, “Prohibited penalties include terminating or limiting the deposit insurance or share insurance of a depository institution solely because the institution provides financial services to a legitimate cannabis-related business and prohibiting or otherwise discouraging a depository institution from offering financial services to such a business.
Additionally, proceeds from a transaction involving activities of a legitimate cannabis-related business are not considered proceeds from unlawful activity. Proceeds from unlawful activity are subject to anti-money laundering laws. Furthermore, a depository institution is not, under federal law, liable or subject to asset forfeiture for providing a loan or other financial services to a legitimate cannabis-related business.”
The Climb Act
On June 23rd, Reps. Carter (D-LA) and Reschenthaler (R-PA) introduced another bill that they hope will help canna-businesses deal with the problems they’re currently facing surrounding banking.
The Capital Lending and Investment for Marijuana Businesses Act – or the CLIMB Act – would open up a whole host of financial services for cannabis businesses, including credit cards, money transfers, and loans. The new proposed bill will also enable canna-businesses to be listed on Nasdaq, the New York Stock Exchange, and other stock exchanges across the country. This new edition, which wasn’t included in the SAFE Act, would open these businesses up to new ways to grow and generate capital.
The Executive Director of the National Cannabis Roundtable, Saphira Gloob, said in a statement that “The CLIMB Act is critical because it provides state legal American businesses with traditional funding and support mechanisms for this emerging industry, which other domestic industries currently enjoy,” reported Leafly.
Falling Flat
Though the newly proposed CLIMB Act has increased support for the idea that cannabis businesses deserve the same treatment from financial institutions as other businesses do, it doesn’t do much to appease those who have already been dealing with the ramifications stemming from their inability to use traditional banking services for years.
Though finding actual statistics on the percentage of cannabis businesses that have been burglarized or robbed proves quite difficult, the fact of the matter is that cash-only businesses have a higher chance of theft, robbery, or burglary than those who deal with financial institutions. People are dying. And no amount of proposals will stop that. What will stop it is affording cannabis-related businesses the same rights to banking as non-canna-businesses. The CLIMB Act, while great in theory, is just another smoke screen intended to get the hopes of those in the cannabis industry.
We need action. And we need it now.
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