The Secure and Fair Enforcement (SAFE) Banking Act, a proposed legislation aimed at allowing banks to do business with companies operating legally within states that have legalized cannabis, had the potential to change the way the cannabis industry operates.
Despite widespread support, the bill failed to pass in Congress, leaving communities at risk of crime and cannabis businesses operating solely with cash. But what could have been the impact of this legislation on the industry?
The SAFE Banking Act was not approved by Congress in December, leaving communities at risk of crime and forcing cannabis businesses to operate solely with cash. Additionally, these businesses will continue to lack access to financial services from banks and other institutions.
What is the SAFE Banking Act?
The SAFE Banking Act is a proposed legislation aimed at allowing banks to do business with cannabis companies operating legally within states that have legalized cannabis. Currently, traditional financial institutions do not facilitate cannabis-related transactions due to cannabis federal illegality.
The measure would prohibit federal regulators from punishing financial institutions for providing services to cannabis companies, their owners, and employees. It would also clarify that funds obtained from state-regulated and compliant cannabis businesses would not be considered as proceeds from illegal activity and provide protection against federal liability for banks, insurers, and other financial institutions that work with such companies.
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