The Safe Banking Act Today — What’s Really Up?

Written by

Mell Green

Mell is a cannabis connoisseur who has been published in nearly 50 online publications surrounding cannabis, including Cannabis Industry Association, Analytical Cannabis, Terpenes and Testing Magazine, Plant People, Byrdie, and...

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Everyone in the cannabis industry has been closely following the Safe Banking Act as it moves through Congress and back to the Senate. The Safe Banking Act has passed Congress for the seventh time, but the Senate refuses to take action on this legislation.

Here’s a quick recap on everything you need to know about the Safe Banking Act before we get into the details.

What Is the Safe Banking Act?

The Safe Banking Act is a bill introduced in 2019 by Ed Perlmutter—a Democratic Member of Congress from Colorado. The bill outlines some legal protections for cannabis companies engaging with depository institutions — aka banks — on a federal level. Here’s what the Safe Banking Act would accomplish according to the Congressional Research Service.

  • Prohibits a federal banking regulator from penalizing banks who provide services to legitimate cannabis businesses
  • This legislation specifically outlines that federal regulators can not limit deposit or share insurance for cannabis companies
  • Federal regulators are also prohibited from discouraging banks from doing business with the legal cannabis industry
  • Banks are also protected from asset forfeiture just for providing services to the cannabis industry
  • Federal banking agencies can not terminate legitimate cannabis business accounts without a valid reason such as threats to national security
  • The bill also offers other protections for industries that provide services to the legitimate cannabis market including legal services and insurance agencies
  • The big one: money from the legal cannabis industry would no longer be considered “proceeds from unlawful activity” on the federal level
  • The Safe Banking Act was first introduced on March 7, 2019. Since then, it has passed Congress on seven separate occasions.

The Safe Banking Act has passed Congress both as a standalone bill and as an addendum to existing legislation such as the HEROES Act COVID-19 relief bill that passed in 2020. Despite passing Congress on multiple occasions, the Safe Banking Act has yet to be taken up by the Senate.

In order for any of the proposed changes in the Safe Banking Act to take place, the bill needs to pass the Senate in order to become part of the growing cannabis legalization framework in the United States.

In short, the Safe Banking Act continues to gain support and make promising moves, but it has yet to be fully passed by the Senate.

What the Safe Banking Act Means for Cannabis Companies

The Safe Banking Act would be a game-changer for cannabis companies. Dispensaries would have the biggest changes after this legislation passed, but virtually any industry that interacts with the legal cannabis market would see additional benefits and protections from the Safe Banking Act.

In order to understand why this is so important, we have to look at what it’s like to handle money at a cannabis dispensary today.

Cannabis is still illegal on the federal level. Even though President Joe Biden recently announced changes to Federal cannabis law, these changes have yet to take place. Cannabis is still listed as a Schedule I drug alongside substances like heroin.

This means that banking institutions can be penalized for providing services for the cannabis industry. This has caused dispensaries to necessarily deal only in cash. This leaves the legal cannabis market vulnerable to fraud, theft, and crime.

The Safe Banking Act would allow the legal cannabis market to finally gain access to proper banking services. This would also give them additional protections when it comes to handling the high volumes of money we’re seeing pass through dispensaries across the country.

Even though cannabis is legal in several states, there’s still a long way to go when it comes to the full legalization of cannabis.

Ongoing Support for Legalization and the Safe Banking Act

There’s good news for people who want the Safe Banking Act to pass. Ever since this bill was introduced in 2019, support for the Safe Banking Act has only gotten stronger.

To date, the Safe Banking Act has bipartisan support from 180 Members of Congress and 42 Senators. The bill also has the support of 21 Governors.

There’s also a lot of industrial support for the Safe Banking Act. This bill has critical backing from commercial and professional organizations like the American Bankers Association, the National Association of State Treasurers, and the Policy Center for Public Health & Safety.

It’s not just professional organizations and politicians that support the Safe Banking Act. Worker’s organizations like the United Food and Commercial Workers (UFCW) have even thrown their weight behind this legislation.

As cannabis legalization continues to grow throughout the states as well as on the federal level, there’s a strong chance that the Safe Banking Act bill passed the Senate sooner rather than later.

Wrapping Up the Status of the Safe Banking Act Today

The Safe Banking Act is going to open up new opportunities for the cannabis industry as well as protect the money that is currently building an illegal market. Until this bill passes, the cannabis industry is going to have to continue to use clever workarounds to navigate the uneven and complicated legal status of marijuana in the United States.