Cannabis businesses don’t have access to traditional banking services. The SAFE Banking Act aims to fix that…
Did you know that most cannabis businesses are cash-only?
Federal law prohibits banks and credit unions from doing business with the United States cannabis industry since profits come from the sale of an illegal substance – even though those sales have been legalized in the states these companies operate in.
But because cannabis is still federally illegal, companies are kept out of traditional banking services utilized in almost every other industry. This means most dispensaries don’t take credit or debit cards at all, while some allow debit-only in the form of a cash withdrawal from the customer’s bank account.
You can imagine the overhead costs this incurs. Dispensaries pay for their own ATMs onsite, armored truck cash pickup, and the additional security measures required to guard an all-cash business.
The Secure and Fair Enforcement Act (SAFE Banking Act) aims to fix this problem – without including federal decriminalization. The bill was passed by the U.S. House of Representatives in 2019 but was killed in the Republican-controlled Senate. It was reintroduced in 2021, passed by the House, and has a much better shot at passing in the Senate, which is now controlled by a Democratic majority.
Senate Majority Leader Chuck Schumer (D-NY) said he would prefer a more comprehensive bill that includes federal legalization of cannabis. But since the House passed the SAFE Banking Act onto a Democratic-majority Senate, that should put more pressure on Schumer and other lawmakers to either pass cannabis banking reform or legalize it entirely.
If the Senate passes the SAFE Banking Act, it would be celebrated by cannabis companies, customers, and investors alike.
Companies will decrease their operating costs, customers can enjoy the convenience of using their cards to purchase cannabis, and investors like you will reap the rewards of both.
Executive Director, National Institute for Cannabis Investors
May 07 2021