The House of Representatives today passed the SAFE Banking Act of 2019, clearing the path for cannabis-related businesses to use commercial banks.
H.R.1595 now moves forward to the Senate, where its fate is not so clear.
The SAFE Banking Act of 2019 was introduced in the House of Representatives in March of this year. Its goal is simple: to remove barriers preventing financial institutions from serving the cannabis industry. The bill promises banks and other institutions a federal “hands off” approach to banking and the cannabis industry. While it’s a step in the right direction, it does not address cannabis legalization itself or any social justice issues that surround the cannabis industry.
Civil rights groups had called on House Speaker Nancy Pelosi (D-CA) and House Majority Leader Steny Hoyer (D-MD) to delay voting on the SAFE Banking Act of 2019. Drug Policy Alliance, Center for American Progress, the ACLU, and Human Rights Watch were among the social justice organizations who sent a letter seeking the delay until a more comprehensive cannabis bill that includes social justice reforms reaches the House floor.
“We are concerned that if the House approves this bill, it will undermine broader and more inclusive efforts to reform our country’s marijuana laws,” the letter stated. It accuses Congress of not doing enough to address the injustices caused by the war on drugs. “The banking bill does not address marijuana reform holistically. Instead, it narrowly addresses the issues of banking and improved access to financial services, measures that would benefit the marijuana industry, not communities who have felt the brunt of prohibition.”
This doesn't mean the end of cannabis legalization, however. The House Judiciary Committee will also examine the MORE Act to address the social justice issues not address in the SAFE Banking Act.
What the SAFE Banking Act Means for Us
Since cannabis has been primarily a cash-only business, providing protections for banks who choose to serve cannabis businesses means that more banks will take cannabis accounts. Should the SAFE Banking Act pass all its hurdles, it will mean dispensaries can start taking credit/debit cards from their customers. This means more secure transactions both for the customer as well as the dispensary.
Many of the bill's supporters heralded the safety that comes with secure banking. “If someone wants to oppose the legalization of marijuana, that’s their prerogative, but American voters have spoken and continue to speak and the fact is you can’t put the genie back in the bottle. Prohibition is over,” Rep. Ed Perlmutter (D-CO) said on the floor. “Our bill is focused solely on taking cash off the streets and making our communities safe and only congress can take these steps to provide this certainty for businesses, employees and financial institutions across the country.”
Americans across the country are voting to approve some level of marijuana use & we need these marijuana businesses & employees to have access to checking accounts, lines of credit & more. #SAFEBanking will improve transparency & reduce the public safety risk in our communities.— Rep. Ed Perlmutter (@RepPerlmutter) September 25, 2019
The bill is the first of its kind as far as cannabis legislation is concerned. Until now, cannabis legislation has been attached to funding bills that need to be renewed each year. H.R.1595 is a standalone bill that, if passed by the Senate and signed by the president, will become its own law. Thus, it doesn't have to be renewed each year. As Marijuana Moment put it, "While the House has approved historic cannabis amendments in the past, including one this summer that would protect all state marijuana programs from federal intervention, those have had to be renewed annually. This is the first time a standalone reform bill was approved in the chamber, and the policy will be permanently codified into law if the Senate follows suit and the president signs it."
What Comes Next
Now that H.R.1595 has passed the House, it will move on to the Senate, where its fate is dubious, at best. The Republican-controlled Senate has been historically stoic when it comes to cannabis. Senate Majority Leader Mitch McConnell (R-KY) has vested interest in hemp crops but has little love for its "illicit cousin" marijuana. Sen. Mike Crapo (R-IL), Chairman of the Senate Banking Committee, has already held hearings on the bill and expects it to come to vote by the end of the year. It may not be the same bill, however.
What do you think about passage of the SAFE Banking Act? How do you think it will affect federal legalization efforts? Let us know in the comments!