Back in mid-2019, a bill was proposed that had the potential to completely change the cannabis industry as we know it. Known as the SAFE Banking Act, this proposed bill was making headlines and having people everywhere talking about the relationship between cannabis sales and the banking industry. It’s coming up on a year since the act was first proposed, and those within the cannabis community are beginning to wonder what’s going to happen. To get you up to date on everything that’s going on with this transformative act, we’ve done our best to break down what the act is, what it could do, and why the buzz over this change has begun to dissipate.
What it is and What Does it Do?
First, let’s start with what this act is and what it entails. The Secure and Fair Enforcement Banking Act ensures that the banking industry does not place unnecessary or unfair penalties on cannabis-related businesses due to their line of work. In the past, Suspicious Activity Reports, or SARs, were placed on marijuana businesses when attempting to deal with deposits or transactions due to the fact that cannabis is technically considered a federally illegal drug. This bill prevents those penalizations from occurring, further prohibiting banking regulators from placing limitations on insurance or discouraging businesses from doing work with cannabis-related businesses.
The bill further defines other stipulations, giving these marijuana companies more protection and security than ever before. For years, dispensaries and medical marijuana doctors have struggled to have a symbiotic relationship with the banks. The SAFE Banking Act gave hope to those businesses. But now, things are a bit unclear.
Marijuana: The Problem With Being a Scheduled l Drug
Many problems arise with marijuana being classified as a Schedule I drug. With obvious issues being that marijuana is far from drugs like heroin, another Schedule I, in terms of danger and fatality, proper research on the plant is also severely limited due to the exaggerated classification, leading to a lot of misinformation and misunderstanding.
One of the biggest impacts that come from the categorization of marijuana, though, is how it influences banking services. As we mentioned, the banks are able to refuse cannabis-related business services of various types because of the work that they do. This means that simple tasks like taking out a loan or opening a savings account suddenly becomes practically impossible. Not only have the banks been able to prohibit services, but they can place SARs that flag the account as utilizing criminal activity, typically hurting the company’s banking history. These hassles are one of the main reasons why most medical and recreational dispensaries across the US only accept cash. Not allowing the use of credit or debit cards eliminates the necessity of working through the banks, though operating entirely cash-only poses its own risks.
Facing Opposition from the Senate: What Happened and Why it Matters
The whole cannabis community had high hopes regarding the SAFE Banking Act. Unfortunately, not much has come from the act yet. As of right now, the bill hasn’t been voted on, so its future is completely up in the air. With the Senate Banking Committee Chairman Mike Crapo being known to oppose marijuana legalization, many were concerned that the SAFE Banking Act may just be a pipe dream.
Back in December, the cannabis community’s worries became a reality: Senator Crapo published a document outlining all of the concerns he has surrounding the SAFE Banking Act. For weeks prior, the Senator had been implying that he wanted to craft his own legislation, so it came as little surprise to see him hesitant toward the bill. With this hesitancy came the idea of more regulation surrounding cannabis, like the idea of placing THC percentage caps or potentially banning high-THC vape cartridges.
Opposition from the Senate when it comes to cannabis is not new. However, in a time where we are continuously moving forward and accepting that we know more than what we did before, continuing to ignore what’s in front of us is only going to cause problems. Cannabis businesses are valid, legitimate businesses that are being discriminated against and associated with criminal activity. This is an antiquated stigma that the cannabis industry has worked so hard to erase; we cannot be moving backward.
What the Future Holds
Still, the complicated relationship between cannabis and the banking system is a bit muddied. Thankfully, there are other bills that are being proposed to help undo the harm we’ve done to those within the cannabis community, and these bills may directly impact the way that the banks see marijuana businesses.
The Marijuana Opportunity, Reinvestment, and Expungement Act, or MORE, is working towards removing the Schedule I classification of marijuana and creating programs to help give grants to those who have been wrongly affected by the unfair categorization. We’ve seen significant support towards the MORE Act, and if it passes, it will be one of the most influential marijuana bills passed in the history of the US.
But, for now, those of us in the cannabis industry must be patient. With slow steps being made towards the MORE Act and the SAFE Banking Act not being forgotten, cannabis is clearly at the forefront of legislation. In the future, we can only hope that cannabis continues to be recognized and respected, giving cannabis-related business owners the chance to run their shops the way they’re meant to.
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