In a ground-breaking – albeit unsurprising – decision, the SAFE Banking Act passed through the house on September 25th, according to Rolling Stone.
The act, which prevents banks from prosecution for engaging with cannabis retailers in legal states, sailed through with a vote of 321-103. Although it had some bipartisan support, the bill was introduced and primarily backed by Democrats.
But it still needs Senate approval to become law. This is where it will face its biggest challenge as lawmakers attempt to push it through a Republican-controlled environment.
Current Risks to Banks
Although there is technically nothing stopping banks from taking the plunge, current laws make such a move extremely risky.
Michael Correia, director of government relations for the National Cannabis Industry Association, explains:
“If you do business with the cannabis industry, you can be liable for breaking money laundering laws.”
If the government decides to take action, the penalties for such activity could be “draconian,” according to Rolling Stone. Given this fact, it is perfectly understandable why these massive banking organizations are not willing to run such risks.
“We Need to Step Up”
Rep. Earl Blumenaur (D-OR) sees the predicament retailers face and knows something needs to be done:
“The states aren’t waiting for us. This is an $11 billion industry and growing. And it’s growing because the people and the states are demanding it. We need to step up.”
Ed Perlmutter (R-CO) – who also happens to be the lead sponsor of the bill – sees its importance from a different perspective:
“This bill is about public safety and protecting states rightsThis one gets the cash off the streets.”
Regardless of the reason, legislators need to take action. The current situation puts dispensaries in a very bad position. With no access to any banking services, many are forced to deal in only cash. Customers cannot use debit or credit, so every transaction is held on the premises. Consequently, they are prime targets for robberies, as the allure of massive cash deposits and street value of their products is a huge motivator for potential thieves.
Oregon Democratic Senator Ron Wyden says:
“I can’t for the life of me figure out why people would want to have folks walk around practically with wheelbarrows full of cash, not letting them use the banking system.”
Smaller institutions, like local banks and credit unions, have been known to step up as best they can. But national banks have a lot more to lose, so they need some legal guarantee that they will not be touched.
A New Era
Whether the SAFE Banking Act passes through the Senate or not, it is clear that we entered a new political era. This is the most cannabis-friendly government the U.S. has ever seen. It gives legalization advocates hope and makes prohibitionists (who continue to cling to the same unproven or debunked talking points) rather nervous.
Following Wednesday’s decision, NORML Political Director Justin Strekal commented that “The federal tide is turning. The era of Congressional inaction is over.”
WeedAdvisor’s Place in the Evolving Cannabis Landscape
It is clear that the U.S. wants to see the cannabis industry gain legitimacy. Although the SAFE Banking Act has one more obstacle to overcome, we hope that it succeeds in making life easier and safer for dispensaries.
Once they have established banking services at their disposal, WeedAdvisor looks forward to engaging with retailers in this new era of marijuana commerce.
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