Under current federal laws, banks and other financial institutions are not permitted to serve cannabis-related businesses since marijuana is still recognized by the federal government as a Schedule 1 drug. This creates challenges in the states where recreational cannabis is legal and startups seek to grow their business just as entrepreneurs in any industry would. Cannabis companies must rely on cash or cryptocurrency to accept payments and cover expenses.
However, that could change with new legislation approved Tuesday by the U.S. House of Representatives. An amendment to the National Defense Authorization Act, the House approved the bipartisan SAFE Banking Act, allowing state-legal cannabis businesses “to access the banking system and help improve public safety by reducing the amount of cash at these businesses,” the House Press Gallery tweeted Tuesday.
— House Press Gallery (@HouseDailyPress) September 22, 2021
The bill was approved to be added to the NDAA by a voice vote, reported MarijuanaMoment.net, which is tracking more than 1,200 drug policy bills across the U.S. While the majority of representatives on both sides largely agreed with the sentiments of the bill, some argued it didn’t belong in legislation related to national defense.
However, Rep. Warren Davidson (R-OH) tied the relationship to the drug cartels, which would make it an issue of national security. “I think the reason it was ruled germane by the parliamentarian is the cartels control the drug trade in the United States. And while most states have made some legal form for marijuana, the cartels still dominate the market,” he said during a short discussion about the bill on the house floor prior to the vote.
Rep. Ed Perlmutter (D-CO), who introduced the bill, pointed out, “This will strengthen the security of our financial system in our country by keeping bad actors like foreign cartels out of the cannabis industry. But most importantly, this amendment will reduce the risk of violent crime in our communities.” As cash businesses, cannabis dispensaries are at high risk for burglaries.
Legislators who oppose the reform say that it could come at the cost of Washington potentially ignoring necessary social justice-focused legalization at the federal level. The SAFE Banking Act works to protect the interests of cannabis business owners, banks, and investors, but fails to address racially disparate prohibition enforcement, according to the website. These legislators, instead, are pushing for nationwide legalization, which would address issues of inequity, legal access to cannabis and industry challenges such as access to banking services.
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Last updated: September 23, 2021