Bipartisan senators led by Senate Majority Leader Chuck Schumer have formally unveiled a revised cannabis banking bill that would grant America’s state-legal cannabis industry access to financial services. Called the Secure and Fair Enforcement Regulation (SAFER) Banking Act, the measure would ensure state-legal cannabis businesses could access bank deposit accounts, insurance, cashless payments and a variety of other financial services that are accessible to businesses in other industries.
The cosponsors for the revised bill include Senators Chuck Schumer, Steve Daines, Jeff Merkley, Kevin Kramer, Cynthia Lummis, Krysten Sinema, Cory Booker, Bob Mendelez and Dan Sullivan. A statement from the cosponsors said the measure would make small businesses and their communities safer by allowing cannabis retailers to use financial services such as bank accounts and business loans. Furthermore, the statement explained that the measure would protect accounts in credit unions or banks from closure by federal banking regulators due to reputational risk.
For most of the state-legal cannabis industry’s existence, federal prohibition has made it nigh impossible for marijuana businesses to access financial services. Because federal law still classifies cannabis as a Schedule I drug with no medical application and potential for abuse, financial institutions shy away from serving businesses in the state-legal cannabis industry to avoid negative consequences from federal regulators.
This has forced many cannabis retailers to operate on a largely cash-only basis, meaning the average cannabis business likely has physical cash stored on its premises during business hours. Since cannabis and cash are highly liquid commodities, cannabis businesses across the country are at risk of theft and have regularly been subjected to violent robberies. Limited access to financial aid and loans also reduces growth opportunities in the sector and ensures that only those with large capital backing can have even a remote chance of success.
The SAFER Banking Act and its previous iterations were designed to fix this issue by finally allowing banks and other financial institutions to serve state-sanctioned cannabis businesses without the threat of legal consequences by the federal government.
Schumer said in a separate statement that the federal government had punished marijuana users and businesses in the sector “for too long” despite the continued harm it does to the country. The failed war on drugs caused significant long-term damage to communities of color and is now causing harm to the nascent cannabis sector. In many cases, federal cannabis policies have put many cannabis business owners in mortal danger.
A markup of the bill will be presented to the Senate Committee on Banking, Housing and Urban Affairs this week. Schumer also noted that he intended to bring the revised cannabis banking bill to the Senate floor as quickly as possible.
The cannabis industry, including enterprises such as Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF), will be waiting to see if this draft law fares any better than previous attempts to enact marijuana banking reforms at the federal level.
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