The House plans to hold a vote this Wednesday on the NLC-backed SAFE Banking Act (H.R. 1595), a bill that would better allow financial institutions to provide banking and insurance services to cannabis related businesses. It is expected to pass the House under suspension of the rules, which requires a two-thirds majority vote, limits time for debate and prohibits floor amendments.
Last year, the legal cannabis industry ballooned to more than $10.8 billion in legal sales nationwide, and 68 percent of the American public now live in a state that has broadly legalized some form of cannabis use. Despite the widespread proliferation of legal cannabis, banks have continued to shun the industry out of fears of legal exposure under federal banking laws. As a result, local governments continue to face a rapidly growing unbanked industry within their community. The industry’s lack of access to basic financial services and reliance on cash-only models poses very real public safety threats and tax collection challenges for these municipalities.
What’s Next for the Bill
While the bill has amassed a large number of proponents, it still faces opposition from those who reject any easing of federal cannabis laws and others who feel the bill fails to combat social inequities. The bill has a far less certain future in the Senate, although support appears to be increasing.
A few small financial institutions have already chosen to provide services to cannabis related businesses, but they do so at their own risk and do not resolve the mounting challenges and threats posed to our communities under current law. Although the bill does not satisfy all of NLC’s cannabis related concerns, it addresses the most significant one: the industry’s lack of access to safe, federally regulated financial services.
About the Author: Brian Egan is NLC’s Principal Associate for Finance, Administration and Intergovernmental Relations. Follow him on Twitter @BeegleME.