In what is tremendous news for America’s state-licensed marijuana industry, the U.S. House of Representatives passed a bill this week that provides a “safe harbor” for banks who want to provide banking services for America’s fast-growing legal cannabis industry.
While legal marijuana businesses are legal at a state-level, marijuana is still illegal federally. Banks have been reluctant to bank the industry due to concerns that they could be “enabling narcotic trafficking.”
The bill, the Secure and Fair Enforcement Banking Act, which is referred to as the SAFE Banking Act, passed with 91 Republicans voting for it and only one Democrat, Alabama Representative Terri Sewell, voting against it.
The big question is what the bill’s fate will be in the Senate, where Senate Majority Leader Mitch McConnell, a big advocate and supporter of the hemp and CBD industries, has been reluctant to allow any marijuana related legislation to be introduced.
In commenting on the bill, a sponsor of the bill, Representative Ed Perlmutter of Colorado, stated, “After six years of working on this bill, the SAFE Banking Act will go a long way in getting cash off our streets and providing certainty so financial institutions can work with cannabis businesses and employees." Perlmutter also stated, "Thousands of employees, businesses and communities across this country have been forced to deal in piles of cash because of the conflict between state and federal law."
To say that it’s been a challenge for state-licensed marijuana businesses to access the banking system, whether it’s a bank account or credit card processors, is a tremendous understatement. Banking issues are a major headache for the industry and a daily challenge for marijuana businesses, whether it’s paying bills, suppliers, and employees, or accepting credit cards from customers.
The bill provides for marijuana businesses being able to open bank accounts, obtain bank loans, accept credit cards, and deposit funds into banks.
One of the main obstacles to the marijuana industry’s growth has been the access to the banking system. Regardless of whether McConnell allows the bill to reach the floor of the Senate with 11 U.S. states now having state-licensed cannabis programs,
this bill or something similar will be passed into law sooner rather than later.
According to Whitney Economics, the state-licensed marijuana industry added more than 64,000 jobs last year. With access to the banking system, the marijuana industry’s growth and job creation will accelerate significantly.
Copyright 2019 Jeffrey Friedland