In late April 2023, the media space became abuzz with marijuana banking bill news. Finally, it appears like all efforts to establish the cannabis SAFE Banking Act will be more resolute and yield much-expected results this time around.
For the uninitiated, it may sound like another legislative dilly-dallying that requires your attention, but you are still determining what to make of it.
Well, we are here to break everything down and provide you with all the SAFE Banking Act 2023 updates you need to stay abreast of the marijuana banking bill news that’s sure to spring up in the coming months.
So, what is the marijuana banking bill, and what are the implications of the Cannabis SAFE Banking Act?
Let’s jump right to it!
What is the Marijuana Banking Bill?
The marijuana banking bill is a bill that provides protection for financial institutions regulated by the federal government and serves state-sanctioned marijuana businesses, according to the Congressional Research Services (CRS) of the Library of Congress.
In clearer terms, what is the marijuana banking bill meant to do?
To fully understand the marijuana bill, you must first know that the U.S. Food and Drug Administration (FDA) currently classifies marijuana as a Schedule 1 substance, which is the same classification as heroin.
As a result, marijuana is illegal, and all activities involving marijuana are described as unlawful activities at the federal level.
With marijuana being illegal at a federal level, financial institutions are bound not to process financial transactions related to marijuana and other illegal substances.
Any financial institution found doing so would face legal retributions, even if the transaction were in a state where cannabis is legal.
Therefore, cannabis businesses resort to cash-only transactions, which is inconvenient and unsafe for businesses and their patrons.
In May 2023, Senator Merkley pointed out during a hearing that there were 129 attacks on cannabis businesses and employees in the past year because robbers believe these establishments always have cash available.
The Marijuana Banking Bill: To What End?
With the backstory provided, what is the marijuana banking bill meant to accomplish?
In line with what you may have read in some other marijuana banking bill news, this bill is simply meant to allow financial institutions, cannabis consumers, cannabis manufacturers, dispensaries, and other entities in the cannabis industry to freely conduct cannabis-related transactions using proper financial channels.
It protects against all legal repercussions institutions, businesses, and users would have ordinarily faced for engaging in “unlawful” financial activities.
This bill is popular among legislators as the cannabis SAFE Banking Act: the Secure and Fair Enforcement (SAFE) Banking Act.
How the SAFE Banking Act Will Affect the Cannabis Industry
The Safe Banking Act is a highly anticipated game-changer in the cannabis industry. When signed into law, it will allow financial institutions to provide banking and insurance services to cannabis-related businesses sanctioned in cannabis-legal states.
For starters, you won’t have to deal with the inconvenience of withdrawing cash from the ATM every time you plan a visit to the dispensary. But that’s not all.
Here is a breakdown of how the SAFE Banking Act will improve things in the cannabis industry as a whole:
- The bill prevents federal banking regulators from penalizing financial institutions solely because they made their banking services available to state-sanctioned marijuana businesses.
- The bill prevents federal banking regulators from ordering or requesting a financial institution to terminate a customer account on the sole reason that they are conducting cannabis-related transactions unless the institution and/or customer have been otherwise proven to engage in other forms of violations.
- The bill stops the notion of tagging proceeds from transactions run by state-sanctioned marijuana businesses as proceeds from unlawful activity.
- The bill prevents financial institutions from being held liable for asset forfeiture under relevant federal laws for providing a mortgage, loan, or other financial service to state-authorized marijuana businesses. This provision may also open up opportunities for small businesses and minority entrepreneurs to access financial incentives needed to keep their marijuana businesses afloat.
One of the major ripple effects of this bill is that it would limit the public safety risks that U.S marijuana businesses, employees, and customers face daily by largely operating cash-only in an industry that is projected to be worth over $30 billion in 2023
SAFE Banking Act 2023 Updates
This is not the first time the Cannabis SAFE Banking Act has been discussed in the chambers and corridors of legislative buildings.
The Marijuana Banking Bill in the Past
Former Colorado House Rep Ed Perlmutter and Washington Rep Denny Heck have been submitting similar bills to Congress every year since 2013.
Recently, there were various attempts to attach the provisions of the Safe Banking Act provisions to other bills, including the HEROES Act and the Marijuana Decriminalization Bill, but none stuck.
So, what makes the bill special this time around? What’s with all the high hopes in marijuana banking bill news that the SAFE Banking Act 2023 hearings will yield a more positive result, unlike similar bills that were presented in the past?
The Cannabis SAFE Banking Act 2023
The renewed hope is a result of impressive bipartisan sponsorship of the current bill and a seeming backing by Senate Majority Leader Chuck Schumer, who led plans last year to include it in must-pass bills alongside the Harnessing Opportunities by Pursuing Expungement (HOPE) Act.
So far, the SAFE Banking Act has passed the House chamber by a massive 321-103 vote across bipartisan lines, as one Independent, 91 Republicans, and 229 Democrats voted for it.
On April 26, 2023, the SAFE Banking Act of 2023 (S.1323) was introduced to the Senate as “A bill to create protections for financial institutions that provide financial services to State-sanctioned marijuana businesses and service providers for such businesses, and for other purposes,” by the Democratic Senator Jeff Merkley and the Republican Senator Steve Daines.
It was read twice and referred to the Senate Committee on Banking, Housing, and Urban Affairs. On May 11, 2023, the committee, in a hearing titled “Examining Cannabis Banking Challenges of Small Businesses and Workers,” focused the discussion on the provisions of the SAFE Banking Act; however, the committee didn’t take any votes on it.
However, the word from within the Senate corridors indicates that Senator Daines has collected enough Republican votes necessary to ensure that the SAFE Banking bill passes the Senate. The act currently has 40 cosponsors.
You can watch the live stream of the hearing here.
So, when will Senate vote on the SAFE banking act?
When Will the SAFE Banking Act Be Voted On?
The Senate is yet to specify the day the safe banking act will be voted on, but the marijuana banking bill news across the media space is majorly filled with prospects that whenever that happens next, the bill will pass.
The Senate Majority Leader Chuck Schumer has, on two occasions in June 2023, expressed confidence on the bipartisan bill getting enacted this year, according to comments by Senator Daines and Wanda James, the first black woman to own a licensed marijuana dispensary.
Meanwhile, the Senate is expected to review and maybe vote on the SAFE Banking Act after its return from the Fourth of July recess. Keep your fingers crossed!
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