The legislation (the Secure and Fair Enforcement Regulation Banking, or SAFER, Banking Act) would allow legal marijuana businesses to use major financial and banking institutions for financing.
Under current federal law, banks and creditors can be federally prosecuted for providing services to businesses selling marijuana, meaning these businesses have been forced to rely on cash transactions—no debit or credit cards. (Notably, while no enforcement action against financial institutions has been taken based solely on providing services to state-legal marijuana businesses, this is not a guarantee of non-enforcement in the future.) Given how quickly the cannabis industry is growing, proponents point out that no industry can thrive without access to financing and banking infrastructure.
While advancing the bill to the Senate floor—where a floor vote is pending—is a positive first step, even if it passes in the Senate, the outcome in the House is less certain. However, notable movement has occurred recently at both the state and federal levels.
For example, the Congressional Research Service recently hinted that the DEA may follow the FDA’s recommendation that marijuana be moved from Schedule I to Schedule III under the Controlled Substances Act. This move, however, will likely do little to affect the marijuana industry’s access to financial services such as banking, financing, etc.
Passage of the SAFER Banking Act, on the other hand, would have a much greater potential to positively influence access to financial services. Moreover, while financial institutions will not be required to service marijuana businesses under the Act, it is predicted that there will be a voluntary influx of financial service providers to the market.
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