An historic thing happened in the Senate this week – a banking bill focused on the cannabis industry cleared through one of its committees.
Known as the SAFER Banking Act – or Secure and Fair Enforcement Regulation – the law would provide a safe harbor for any marijuana growers and dispensaries that are operating legally on a state level so that they can gain access to credit unions and banks that are regulated by the federal government.
While marijuana production, sales and even recreational usage has been legalized in many states, it remains illegal from a federal perspective. That has caused one pretty major concern for companies in the business – they have had trouble doing business with some financial institutions.
Some credit unions and banks have refused to do business with companies in the marijuana industry, as they have been wary of the federal ban.
Last week, an updated version of the Act was introduced by a bipartisan group of Senators – Democratic Majority Leader Chuck Schumer of New York, Democrat Jeff Merkley of Oregon, Independent Senator Kyrsten Sinema of Arizona, and Republicans Cynthia Lummis of Wyoming and Steve Daines of Montana.
The House has passed different versions of this bill seven times already. This marks the first time it’s been able to advance in the upper chamber, though.
While key compromises were struck in order for the bill to move forward, it wasn’t without drama. There were particular hiccups over criminal justice reform as well as “Operation Choke Point,” an Obama-era policy.
During opening remarks of the Senate Banking Committee hearing, chairman Sherrod Brown, a Democrat from Ohio, said:
“It’s been quite a journey.”
Members of the committee advanced the SAFER Banking Act by a vote of 14-9. There were only three Republicans who voted to advance the bill – Daines and Lummis, who were both sponsors of the bill, as well as Kevin Cramer of North Dakota.
The only Democrat to break from the party to vote no was Raphael Warnock of Georgia. He said he had concerns that the bill might increase the racial wealth gap and “just make the comfortable more comfortable.”
As he explained:
“This bill will make life safer for bankers, for businesses and financial institutions, some of whom have been profiting from the cannabis industry illegally for years, which is ironic given many of the regular folks who illegally sold or used cannabis are sitting in jail cells right now.”
MJBiz Factbook released an analysis in April that found that legal sales of cannabis in the U.S. should reach $33.6 billion in 2023.
Democratic Senator Elizabeth Warren from Massachusetts said that her problem with the bill is that most of that money isn’t going to go to communities that are hardest hit by drugs. She pointed out that less than 5% of the owners of cannabis businesses are Black.
Yet, this bill is a huge victory for the cannabis industry as a whole, as they can now gain access to capital and safe banking for their legal business operations.
