Will the cannabis banking bill get the Senate's green light?
The SAFER Banking Act is advancing to the US Senate for the first time, clearing a major hurdle for legal cannabis businesses. Does it stand a chance?
The Senate Banking Committee passed a new version of a cannabis banking bill, "raising hopes for the cash-dependent cannabis sector to get access to regular banking services," Reuters reported. A bipartisan group of senators reintroduced the Secure and Fair Enforcement Regulation (SAFER) Banking Act last week. The bill "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,” the senators said in a joint statement last week. “It also prevents federal bank regulators from ordering a bank or credit union to close an account based on reputational risk,” they added. On Wednesday, the committee voted 14-9 to send the bill to the Senate floor with a few amendments.
If passed, the bill would provide legal protection for banks and other financial institutions if they service legal cannabis businesses. Previous iterations of the bill have passed the House seven times, but this vote marks the first time it was advanced in the Senate. While support for the bill is bipartisan, so is the opposition. It may be finally set to hit the Senate floor for a vote, but the path forward is still complicated.
Up next, the bill "faces a possible federal government shutdown on Oct. 1 amid a political battle between the Democrat-controlled Senate and the Republican-controlled House of Representatives," MJ Biz Daily noted. A shutdown would "pose risks for SAFER Banking as it winds its way through Congress, burning time that legislators could otherwise use to pass legislation."
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
A 'historic moment' for cannabis industry advocates
Sen. Jeff Merkley (D-Ore.), the lead sponsor of the bill, deemed the passage a “historic moment” and an “example of significant bipartisan cooperation,” CNBC reported. Making legal cannabis businesses operate as cash-only "is dangerous for our communities," Merkely noted, calling it "an open invitation to robberies, muggings, money laundering, and organized crime." He remains determined to build "bipartisan momentum to finally get a bill signed into law that ends the cannabis cash economy and improves public safety across the nation,” he added.
Calling the Senate committee vote a "milestone victory in the history of the sector is to make a gross understatement," Forbes' Iris Dorbian said. Passing the bill will protect businesses from the threat of theft and criminal activity and enable them to "open accounts with mainstream banks," Dorbian added. "Leaders in the community are rightfully applauding the Senate Committee’s passage of this landmark legislation."
The bill could bring "much-needed clarity and security to financial institutions willing to serve state-sanctioned marijuana businesses,” Mike Bologna, CEO of vaporizer provider Dip Devices, told Dorbian. Passing the bill would "facilitate easier access to capital, encourage more responsible financial practices, and foster innovation within the cannabis industry."
The bill protects financial institutions at the expense of others
Sen. Raphael Warnock (D-Ga.), who voted against the act, worried the bill would only expand the racial wealth gap in the legal cannabis industry and "just make the comfortable more comfortable,” he said per The Hill. The bill would make it safer for "bankers, for businesses and financial institutions," including some who profited "from the cannabis industry illegally for years," Warnock added, "which is ironic given many of the regular folks who illegally sold or used cannabis are sitting in jail cells right now,” Warnock said.
Republicans think the tweaked bill does not do enough to include other industries prone to losing accounts due to recreational risk. The legislation would give "special protections to businesses conducting a federally illicit activity that legal businesses simply do not enjoy,” Sen. Mike Rounds (R-S.D.) said, per The Hill report. “Meanwhile, legal industries such as firearms or traditional fuel sources still must fight to even hold accounts.”
Taking issue with language within the bill that allowed banks to cease business based on reputational risk, Sen Mike Crapo (R-Idaho) argued that it didn't do enough to keep banking regulators at bay. “You cannot force our financial institutions in this country to cease banking clients because their industry is disfavored,” Crapo said, according to Courtroom News Service.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Theara Coleman has worked as a staff writer at The Week since September 2022. She frequently writes about technology, education, literature and general news. She was previously a contributing writer and assistant editor at Honeysuckle Magazine, where she covered racial politics and cannabis industry news.
-
Today's political cartoons - December 21, 2024
Cartoons Saturday's cartoons - losing it, pedal to the metal, and more
By The Week US Published
-
Three fun, festive activities to make the magic happen this Christmas Day
Inspire your children to help set the table, stage a pantomime and write thank-you letters this Christmas!
By The Week Junior Published
-
The best books of 2024 to give this Christmas
The Week Recommends From Percival Everett to Rachel Clarke these are the critics' favourite books from 2024
By The Week UK Published
-
'All too often, we get caught up in tunnel vision'
Instant Opinion Opinion, comment and editorials of the day
By Justin Klawans, The Week US Published
-
Democrats blame 'President Musk' for looming shutdown
Speed Read The House of Representatives rejected a spending package that would've funding the government into 2025
By Peter Weber, The Week US Published
-
Trump, Musk sink spending bill, teeing up shutdown
Speed Read House Republicans abandoned the bill at the behest of the two men
By Peter Weber, The Week US Published
-
Congress reaches spending deal to avert shutdown
Speed Read The bill would fund the government through March 14, 2025
By Peter Weber, The Week US Published
-
Could Trump use impoundment to skate around Congress?
Today's Big Question The incoming president could refuse to spend money allocated by the legislative branch
By Justin Klawans, The Week US Published
-
'Drug epidemics are often cyclical'
Instant Opinion Opinion, comment and editorials of the day
By Justin Klawans, The Week US Published
-
What will Trump do on day one?
Today's Big Question Presidents often promise immediate action, but rarely deliver
By David Faris Published
-
The future of X
Talking Point Trump's ascendancy is reviving the platform's coffers, whether or not a merger is on the cards
By The Week UK Published