The United States House of Representatives passed a measure late Tuesday night that would allow banks to conduct business with marijuana businesses without fear of being fined, providing impetus to the Cannabis industry’s most contentious change.
It was approved by voice vote, with no member requesting a roll call vote. The bill has now been linked to a large-scale military funding bill.
The SAFE Banking Act will be a benefit to marijuana businesses, which have been hampered by the need to transact in cash due to federal prohibitions.
This comes only moments after the House Rules Committee cleared Rep. Ed Perlmutter’s (D-CO) proposal for floor consideration. It was one of a number of drug-policy proposals anticipated to be included in the National Defense Authorization Act (NDAA).
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Just as marijuana is becoming more legal, this has resulted in increased security expenditures and logistical issues. According to New Frontier Data, a cannabis research company, over three dozen states currently allow medicinal or recreational usage.
Perlmutter said before the vote on the floor, “This will strengthen the security of our financial system in our country by keeping bad actors like foreign cartels out of the cannabis industry. But most importantly, this amendment will reduce the risk of violent crime in our communities.”
The proposal, which had previously had bipartisan support in the House, was adopted by voice vote as part of the National Defense Authorization Act this time.
Rep. Mike Rogers (R-AL) called the plan a “great piece of legislation,” but argued that it should be considered separately from the National Defense Authorization Act.
However, Rep. Warren Davidson (R-OH) said that cannabis reform should be included in the national security bill.
“I believe the parliamentarian deemed it relevant since cartels dominate the drug trade in the United States. And, despite the fact that most states have legalized marijuana in some form, cartels continue to dominate the market,” he added.
“Another reason is that the money is on the illicit market. In many states, legal activities cannot be banked… We can’t stop the cartels because of this.”
Representative Ed Perlmutter, a Colorado Democrat who reintroduced the bill, has stated that giving cannabis companies access to the financial system will inject more money back into the economy and enable for the creation of good-paying employment. According to New Frontier Data, the legal cannabis business in the United States generated $20.3 billion in sales in 2020.
This is the fifth in the last few years that the House has approved cannabis banking reform, which has received widespread backing both as independent legislation and as part of larger legislation.
However, it is still a long way from the industry’s wish list of legislative changes, which includes full legalization and tax reductions.
Some politicians, especially in the Senate, where Senate Majority Leader Chuck Schumer (D-NY) is finalizing a marijuana legalization measure, have argued that the banking problem should be addressed by eliminating marijuana prohibition in its entirety.
The existing regulations requiring marijuana businesses to be all-cash, according to the U.S. Cannabis Council, a trade organization that represents the sector, are a security risk.
“Last year, over $17 billion in legal cannabis was sold in the United States, with cash transactions accounting for the vast majority of sales. The council’s chief executive Steven Hawkins said in a statement before the law passed, “Forcing legal, well-regulated cannabis companies to do the majority of their business in cash is archaic and an obvious danger to public safety.”
Despite the fact that the House has not yet taken up a legalization bill this year, some of the most vocal proponents of comprehensive reform, like as Rep. Earl Blumenauer (D-OR), voted in support of the SAFE Banking Act in April.