The SAFER Banking Act has been making headlines recently after passing through the Senate Banking Committee with a 14-9 vote. This bill, which aims to provide access to banking services for cannabis businesses, has been met with both praise and criticism from different lawmakers and stakeholders.
While some see it as a positive step towards creating a safer and more transparent environment for the cannabis industry, others believe it will have negative consequences. The controversy surrounding this bill has sparked a heated debate, and its fate is uncertain as it heads to the Senate Floor for a vote.
Positive Reactions to the Bill Passing Senate Banking Committee
Several Democrats and supporters of the SAFER Banking Act have spoken out in favor of this bill, with Senate Majority Leader Chuck Schumer pledged to bring it to the Senate floor “very soon.” They believe that providing banking services to cannabis businesses will create a safer and more transparent environment for the industry, as currently, many companies are forced to operate solely on cash.
“Our SAFER Banking Act will connect cannabis businesses, especially ones in minority and underserved communities, to find traditional financial resources like bank accounts and small business loans, creating a safer and more transparent environment for the industry to grow,” said Schumer. “Now is the time to get it done.”
The @SenateBanking Committee has passed our SAFER Banking Act—a huge step to help cannabis businesses operate more safely and efficiently.— Chuck Schumer (@SenSchumer) September 27, 2023
I've long advocated to expunge records for cannabis offenses, and I’m working to include provisions like HOPE and GRAM.
Now is the time.
This lack of access to banking services not only poses safety risks for employees and customers but also makes it difficult for businesses to operate and pay taxes. The positive reactions from Democrats indicate their belief that this bill can address these issues effectively.
Reese Xavier, CEO and managing partner of HT23 Growers, told The Hill in a phone interview that he was excited the SAFER Banking Act passed out of committee. But he’s hoping to see the bill provide cannabis companies the same access to loans, mortgages, and other services as it does to hemp sellers.
“That then allows us to gain access to the capital that we need to stand up these businesses to really make a difference in communities of color,” Xavier said.
Criticisms Of SAFER Banking Act Moving To Senate Floor
On the other side, there has been criticism from Republicans and some Democrats towards the SAFER Banking Act. U.S. Senator Pete Ricketts, along with a group of Republican senators, wrote a letter to Senate leaders Chuck Schumer and Mitch McConnell, vowing to oppose the SAFER Banking Act if it advances to the Senate Floor for a vote as a stand-alone bill or part of any larger package. The senators expressed their concerns about how the SAFER Banking Act would facilitate money laundering for drug cartels and investments in the industry that could lead to even higher THC potency in marijuana products.
“The growth of the marijuana industry has already caused THC potency to skyrocket from 2-5% in the 1970s to 99% in many concentrates sold today,” the senators wrote. “The significant mental health damage to youth caused by these products will only worsen with the passage of the SAFER Banking Act, as the industry will use new investments to increase potency further and bring in new users, including children. Marijuana use is associated with psychosis, motor vehicle accidents, respiratory problems, and low birth weight.”
“This legislation also compromises the integrity of the United States banking system by giving banks government approval to participate in illegal activity, setting a dangerous new precedent,” the senators continued. “Allowing banking access to a Schedule I drug sets a dangerous legal precedent and will help facilitate money laundering for drug cartels.”
It wasn’t just Republicans opposing the SAFER Banking Act. Sen. Raphael Warnock (D-Ga.) broke with his party, saying he was concerned the bill could increase the racial wealth gap and “just make the comfortable more comfortable.”
“This bill will make life safer for bankers, for businesses and financial institutions, some of whom have been profiting from the cannabis industry illegally for years, which is ironic given many of the regular folks who illegally sold or used cannabis are sitting in jail cells right now,” Warnock said per The Hill.
Headed to the @SenateBanking hearing on the #SAFEBanking Act.— Senator Reverend Raphael Warnock (@SenatorWarnock) September 27, 2023
But it only makes wealthy cannabis investors “safer” to make more profit—it does nothing for the millions of Americans hardest hit by the War on Drugs.
Tune in now to hear my deep concerns: https://t.co/EGSSITZRJA
What’s Next for the SAFER Banking Act
Despite passing the Senate Banking Committee with a 14-9 vote, the fate of the SAFER Banking Act remains uncertain as it heads to the Senate floor for a possible vote. While supporters are optimistic about its future, there is strong opposition from some lawmakers that could prevent it from becoming law. Let’s also not forget that SAFE banking bill passed has the House 7 times previously. But the difference now is that the House is Republican controlled. So, while it may pass the Senate this time, the roadblock all the last times, there’s no guarantee to pass the House currently.
Senate Majority Leader Chuck Schumer has pledged to bring the bill to the floor “very soon,” but it is unclear when exactly that will happen. The bill could be voted on as a stand-alone bill or included in a larger package, such as the upcoming infrastructure bill.
However, with Republicans and some Democrats expressing concerns about the potential consequences of this bill, its passage is far from guaranteed. Opponents are calling for more safeguards and regulations to be put in place before allowing banking access for marijuana businesses.
It remains to be seen how the votes will fall on this issue. Still, one thing is clear: cannabis industry advocates and lawmakers alike are eager to see progress made in terms of banking access for marijuana businesses. Whether the SAFER Banking Act or a similar bill makes it through Congress, it’s clear that changes need to be made in order for the cannabis industry to thrive and contribute to the economy. Until then, marijuana businesses will continue to face challenges in accessing essential financial services, hindering their growth and potential impact on communities.
As such, it is crucial for lawmakers to consider all perspectives and develop a solution that can address these issues effectively. Only time will tell what the future holds for the SAFER Banking Act, but one thing is certain: the conversation around cannabis banking access is far from over. So, let’s keep an eye on the developments and hope for a positive outcome that can benefit all stakeholders involved.