The lack of a financial infrastructure is one of the biggest roadblocks to stability and growth in the cannabis industry. Many financial institutions refuse to handle accounts associated with the cannabis industry; many that do reverse course without warning, leaving entrepreneurs scrambling to pay their employees and suppliers with little to no warning. It’s a major headache and contributes to a frustrating and unstable environment in which to build a business.
But you already know that.
Today, we want to talk about a solution: The SAFE Banking Act. Under the official designation H.R. 1595, it was passed by the House of Representatives back in September, 2019. Now, its passage in the Senate is in jeopardy after the chairman of the Senate Banking Committee signaled his opposition to the bill in December.
It’s a potentially crushing blow, but its defeat isn’t a done deal. Here’s a little background on what got us to this point, and—most importantly—what you can do to help support its passage.
SAFE Banking Act: Cleaning up the Cannabis Industry’s Banking Dilemma
When the SAFE Banking Act was first introduced back in March 2019, its supporters were careful to frame it in terms of public safety, rather than the full legalization of cannabis. Cannabis is legal on a state-by-state basis anyway, goes the reasoning; let’s do what we can to foster the kind of small-business growth that lawmakers on both sides of the aisles can agree on, and reduce the exposure of those reduced to handling large amounts of cash on a daily basis.
The SAFE Banking Act’s primary sponsor, Representative Ed Perlmutter, Democrat of Colorado, has been pushing for cannabis banking reform for years.
In simple terms, the SAFE Banking Act shields financial institutions from prosecution arising from cannabis-associated clients and accounts. In a positive sign, after the bill had already garnered strong bipartisan support for the bill, the insurance industry signed on as well, lobbying for language that protects insurers in much the same fashion as it does banks. So far, so good.
But as so often happens, once the bill reached the Senate, things got complicated. There, Banking Committee Chairman Mike Crapo—a conservative Republican from Idaho, a state with some of the nation’s harshest anti-cannabis laws—signaled his opposition to the bill in December. In conflating the desire for safe and sane banking options with the push for the full legalization of cannabis, Senator Crapo threw a major wrench in the possibility of the cannabis industry having a stable and reliable financial grounding anytime soon.
The SAFE Banking Act: What You Can Do to Help
Senator Crapo isn’t the only Senator to voice his objection to the bill. Reliably anti-cannabis stalwart Senate Majority Leader Mitch McConnell—despite supporting 2018’s Farm Bill, which took the muzzle off the hemp industry—has signaled his reluctance to support the SAFE Banking Act.
That’s a bad sign, but again: It ain’t over yet. Senators from both parties have offered their support, and it’s hoped more will join. How can that happen? It starts with your giving them a call.
We’re serious. Even taking a minute to leave a voicemail in your senator’s inbox makes a difference. You’ll join the over 30 cannabis trade groups which are currently lobbying the Senate hard; every single call or letter reminds senators that a lot is riding on this bill.
How do you reach your senator? That’s easy: Start with this directory. Or if you prefer, you can send a letter or card. Remember: We’re all in this together. The cannabis industry needs a reliable financial bedrock upon which to grow. The SAFE Banking Act will help enable it, but it needs your help to pass.