House Approves Cannabis Banking Bill

The bill aims to ease cannabis companies the access to regular financial services. While the House nods positively to remove finance management burden for the industry, the ball is now in the Senate's hands, which is next to vote on the cannabis banking bill. 

On Monday (April 19), the US House of Representatives, with a 321-101 vote, approved the SAFE Banking Act sponsored by Rep. Ed Perlmutter, a Colorado Democrat; other lobby groups also back the bill.

The bill addresses banking-system regulators, disallowing them to penalize banks or credit unions that do business with "cannabis-related legitimate business," their servicer providers, or state or local governments with jurisdiction over the companies.

According to analysts, this is a step forward to removing an obstacle that threatens the development of the cannabis industry nationwide.

The bill will benefit those states that already have a regulation on the medical and/or recreational use of pot, which according to the National Conference of State Legislatures, includes 36 states that regulate medical cannabis and 17 states that regulate adult use of the plant.

The bill clarifies that proceeds from legal pot businesses would not be considered illegal and directs federal regulators to create rules and guidelines for monitoring such banking activity in the future.

“After years of bringing up this issue, I’m thrilled to see overwhelming support for this bipartisan, commonsense legislation in the U.S. House once again. I feel optimistic about the path forward for the SAFE Banking Act and, more broadly, reforms to our federal cannabis laws,” Perlmutter, who sponsored the bill, said in a statement.

During Monday debates, supporters said the bill would aid cannabis-related businesses and will also reduce crime related to the cash nature of those businesses.

“These businesses and their employees become targets for crime — robbery, assault and more — by dealing all in cash,” Perlmutter said. “It is an invitation to money laundering now, because of the vast amount of cash that is circulated,” said another bill supporter, Rep. Earl Blumenauer, an Oregon Democrat.

Cautious not to breach federal laws, banks have largely been reluctant to do any business with pot-selling companies. This has meant fewer opportunities for the cannabis industry as a whole, such as doing business only in cash, relying on small financial institutions, or being entirely stripped of relief packages in times of crisis. 

The American Bankers Associations, which has advocated relentlessly for the SAFE Banking Act, has said in a statement on Monday that "banks find themselves in a difficult situation due to the conflict between state and federal law, with local communities encouraging them to bank cannabis businesses and federal law prohibiting it." 

"Congress must act to resolve this conflict," the group said. The House voted for the first time in favor of the cannabis banking bill back in 2019, but the bill then perished in the Senate. The 2019 vote was similar to the one on Monday; the House then approved with 321-103. 

It remains to see what will happen at this time with the bill in a Democrat-controlled Senate. In a recent interview with Politico, Senate Majority Leader Chuck Schumer has described the current constellation of the Congress as an opportunity that comes around "maybe twice a century." Schumer has said he would aim to move forward legislation on regulating the adult use of cannabis. On the SAFE Banking Act, he said he would like to see the bill advance as part of a more comprehensive measure, even if President Joe Biden was not in favor.