Marijuana businesses can now breathe a sigh of relief. In yet another historic move, the U.S. House of Representatives offered their approval to the Cannabis Banking bill that allows marijuana businesses to access the national banking system. This move is being believed to be a major victory for the marijuana industry that had previously been crippled owing to the restrictions.
The SAFE Banking Act was passed in the Democratic-controlled house by a 321-103 vote. The bill is the first standalone legislation to be passed by either the full house or Senate. Two-thirds majority was needed for the passage. However, the bill ended up receiving more than three-quarters of the vote.
If the bill is passed and signed into law, it will prevent the law from punishing banks that choose to serve cannabis companies as per the state laws. Marijuana still remains illegal at the federal level although the states continue to legalize it.
The move has been applauded by the American Bankers Association. The CEO and President of ABA stated that, “By helping to provide clarity for the financial sector in those states where cannabis is legal, this bill will help banks meet the needs of their communities while reducing cash-motivated crimes, increasing the efficiency of tax collections and improving the cannabis industry’s financial accountability”. He also urged the lawmakers to resolve the conflict between the federal and the state law when it comes to cannabis banking.
The Cannabis Trade Federation has also appreciated the move. Neal Levine, the CEO of the Federation claimed, “Allowing lawful cannabis companies to access commercial banking services and end their reliance on cash will greatly improve public safety, increase transparency, and promote regulatory compliance.”
This move is great news for cannabis retailers, American banking and credit union associations. Earlier the banks providing services to cannabis businesses had to face civil liability and criminal charges under certain statutes. This is the reason why such companies had to operate solely on cash.
Seldom was it realized that this paved the way for money laundering and tax evasion. This muffled the opportunity of business in the cannabis industry earlier. However, the new move can turn things around for the entrepreneurs who have ventured into the industry. The SAFE banking bill will would also stifle violent crime against cannabis store owners and also against their employees.
The executive director of the Marijuana Policy Project, Steve Hawkins claimed that the move is “an indication that Congress is more willing than ever to support and take action on sensible cannabis policies.”
Rep. Patrick McHenry, however, opposed the bill and said that Congress needs to participate in a larger debate to comprehend the underlying issue of the move. He argued, “We do not fully understand the sweeping implications of this legislation. We do not yet know what the resulting regulatory regime will look like, nor do we have any assurance it will not expose the current financial system to illicit activity.”
The bill has just offered freedom to financial institutions to expand their activities in the cannabis sector as well. It has also offered protection to the businessmen who have ventured into the sector. However, it does not change the fact that cannabis still remains a schedule 1 substance and is prohibited.
This bill is more of a reform bill in the cannabis industry. Steny Hoyer, House Majority Leader expressed his views on the move. He said that he appreciates the SAFE Banking Act and also believes that it does not go far enough.
Though there are mixed views on the passage of the bill, the implications would not be clearly known until the law is enacted.