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Industry reacts

US: Cannabis banking act approved by Senate Committee for the first time

The SAFER Banking Act, which would give legal cannabis businesses access to traditional financial institutions, has officially passed the Senate Banking Committee. With cannabis being federally illegal in the U.S., many cannabis businesses don’t have access to bank accounts and credit card services. As a result, many cannabis businesses are forced to operate in cash, making them vulnerable to crime. Passing with a 14-9 vote, this is the first time that Senate members have voted in favor of the cannabis banking measure. What used to be the SAFE Banking Act, which was passed by the House of Representatives seven times, has been amended to the SAFER (Secure and Fair Enforcement Regulation) Banking Act.

The bipartisan group of senators that introduced the SAFER Banking Act stated: “This legislation will help make our communities and small businesses safer by giving legal cannabis businesses access to traditional financial institutions, including bank accounts and small business loans. It also prevents federal bank regulators from ordering a bank or credit union to close an account based on reputational risk.” Majority Leader Chuck Schumer has vowed to swiftly bring the bill to the floor for full Senate consideration.

“Urgently needed”
“This is the first time we’ve been optimistic about the passage of the SAFER Act. It’s encouraging that the bill is originating in the Senate, where its antecedents were unsuccessful,” says Kevin Hart, Founder and CEO of Green Check. “While the proposed language in the legislation is far from perfect, it would represent real progress if it is adopted. I’m confident that, if approved, the bill will serve as a catalyst for more banks and credit unions to serve the legal cannabis industry. The language provides more solid guidance on the requirements for a wider range of financial services, including payments,” he says. “We know the markup is merely the next step but with each hint of action out of Congress, more financial institutions recognize that federal legislation will eventually be adopted and that they can serve the cannabis industry today.”

According to Saphira Galoob, Ececutive Director of the National Cannabis Roundtable, the action is historic and urgently needed. “It comes at a time where it could not be more urgently needed to help the regulated cannabis industry in 38 states be able to compete against the growing threat of an illicit market that greatly risks public safety and consumer safety. We are heartened to see broad bipartisan support move this bill out of committee, and we look forward to momentum and support continuing to build as it moves to the Senate Floor and ultimately to the House, which has previously overwhelmingly passed the bill – at long last getting this critical measure signed into law this Congress.”

The Teamsters Union emphasizes the importance of the SAFER Banking Act providing safer working conditions for cannabis workers. “As Congress works to establish the necessary guardrails around cannabis legalization, the labor and safety interests of workers must be paramount,” said Teamsters General President Sean M. O’Brien in a letter to the committee. “Passing SAFER banking is a necessary part of this process and can help improve working conditions while easing operational burdens for employers across the country.”

“It does not solve all challenges”
While Sundie Seefried, CEO of Safe Harbor Financial, applauds the action, she points out that it does not solve all banking challenges. “We applaud the Senate Committee on Banking, Housing and Urban Affairs on their efforts to drive incremental change forward. However, make no mistake, this measure does not solve all of the banking challenges faced by the cannabis industry,” she says. “Since cannabis is still listed as a Schedule I drug under the Controlled Substance Act (CSA), the current guidelines and regulations will require that banks and credit unions continue to fulfill BSA obligations outlined in the 2014 FinCEN guidance which can be quite extensive. Financial institutions will be required to file regular reports, requiring substantial resources to ensure compliance from financial and small businesses and demanding precious operational resources.”

According to Sundie, cannabis’ real golden goose is rescheduling. “Unless certain obligations are substantially changed, the cannabis industry will remain both cash intensive at the same time it is forced to fight an active, illicit market operating in plain sight. This is simply unacceptable and more must be done to equal the playing field for these small business owners.”