Although 103 representatives in the House opposed it, an overwhelming 321 supported passing the act. It was a red-letter day witnessing such strong bipartisan support.

Of course, it’s difficult to say how it will fare in the more conservative Senate.

And, as with most things in life, the passing of the act in the House is not all wine and roses either.

How SAFE Threatens MORE

Critics of the act aren’t all conservative Republicans terrified of “hemp’s illicit cousin” (Mitch McConnell’s words, not ours) and its Schedule 1 status.

Some critics of the act include the Drug Policy Alliance (DPA), who are concerned that SAFE will take the focus off the long fought for Marijuana Opportunity Reinvestment and Expungement Act (MORE).

In fact, there’s a legitimate fear that the way the act is currently written will not only maintain, but potentially create even more inequity in the industry.

They don’t want to see momentum on marijuana reform stall out and had hoped for a more comprehensive bill that prioritized equity and justice for the communities who have suffered the most under prohibition.

So now the biggest hope is that the major reform legislation that was introduced by House Democrats in July that aims to reschedule cannabis and expunge past marijuana convictions will not become an afterthought.

So What Is the SAFE Banking Act?

You know how when you run a business and you need financial help, you can just zip on over to the bank or some other financial institution and if everything is kosher, they’ll help you out?

Not so with a cannabis business. This is among one of the many challenges of running this sort of business.

Because, archaic as it is, marijuana is still sitting cozily alongside cocaine and heroin as a Schedule 1 drug. And that means that financial institutions and other businesses that provide loans, capital, investments, or other financial services to cannabis businesses would not be protected by the Federal government.

The SAFE Banking Act would offer them protections.

And get this. The measure also protects companies that service cannabis businesses – such as plumbers and electricians. Currently, these non-cannabis companies are frequently penalized by banks for working with them.

Furthermore, because cannabis facilities often possess large amounts of cash that they aren’t permitted to keep in a bank, they are targets for criminal activity. The act, by proxy, would protect the actual cannabis companies and the neighborhoods that surround them.

Advocates See It As a Victory

Despite the fact that some House Republicans who voted against the measure have expressed concern the bill will actually give criminals and cartels easier access to these financial institutions, 91 House Republicans supported it.

This represents the first time in history that a House supermajority voted to ease federal cannabis enforcement. A milestone, to be sure.

So maybe the tides are turning. It’s just really difficult to know what’s going on in the federal government anymore these days.

The Senate is pretty busy right now taking care of year-end appropriations bills that have to be passed in order to avoid a government shutdown. And whether Mitch McConnell will move to bring the bill to a vote at all re-mains to be seen.

It’s anyone’s guess.

Do You Own a Cannabis Business?

If so, you more than likely see the passing of the SAFE Banking Act as a victory.

And we celebrate anything that helps cannabis businesses succeed. That’s why we specialize in cannabis marketing and public relations.

Contact us today to find out how we can contribute to the success of YOUR business.

The post SAFE Banking Act Passed by House appeared first on GROW Cannabis Marketing.

No?

Well, if you’re wondering, just ask the owners of dispensaries who must routinely engage in this activity because banks won’t work with them for fear of repercussions.

Hence the Safe and Fair Enforcement Banking Act – i.e. the SAFE Banking Act.

Filed last Thursday and led by Reps. Ed Perlmutter (D-CO), Denny Heck (D-WA), Steve Stivers (R-O) and Warren Davidson (R-OH), this bipartisan bill aims to protect financial institutions from being penalized by federal regulators for servicing marijuana-related businesses.

The bill was initially introduced in 2017, but didn’t garner legislation. So Perlmutter decided it was high time to reintroduce the bill so that cannabis businesses can at long last access the banking system.

“Congress needs to act to reduce risks for employees, businesses & communities across the country,” he says.

And he’s right.

The Current Challenges

Medical marijuana is legal in most states in the U.S. Even so, its status as a dangerous Schedule 1 drug under the Controlled Substances Act makes it illegal under federal law.

Thus, in the (decidedly cloudy) eyes of the federal government, selling marijuana is at par with dealing heroin or other dangerous narcotics.

Banks that step up to service legal cannabis operators are required to file a suspicious activity report for every transaction made with the business. And these rules stretch out to every company the marijuana operators interacts with – creating mountains of red tape and mounting expenses that are simply too much of a pain in the ass for most banks.

And the banks that ARE willing to help them out have to recoup all those costs by applying exorbitant fees. Plus, they’re still putting themselves at serious risk of criminal prosecution.

On what charges, you ask?  Aiding and abetting a federal crime and money laundering.

As a result, many commercial operators are forced to conduct most business with cash. Not only does this stir serious security concerns, but also creates a lack of funding to scale these businesses.

High-Fiving Our Neighbors to the North

Along with the mess above, these banking restrictions mean that cannabis firms can’t list on NYSE or NASDAQ until federal prohibition ends.

So they’re looking north to the Canadian Securities Exchange.

In other words, this arcane act of prohibition is setting up Canadian investors to get rich from the success of the U.S. cannabis market. In fact, finance firms there are already setting up options contracts so they can buy shares in cannabis firms once prohibition ends here.

Do marijuana opponents in D.C. really want to keep squelching growth of one of the fastest-growing industries in the U.S. – subsequently handing over control of that sector to our neighbors to the north?

That seems unlikely. But without sensible banking laws in place, that’s exactly what’s going to keep happening.

The SAFE Banking Act Makes Perfect Sense

Even though the prior version of the SAFE Banking Act didn’t advance to votes in the last Congress, folks are optimistic about its prospects this time.

And it truly is bipartisan. Somewhat, at least.

Of the 108 members who have signed onto the bill as initial cosponsors, nine of them are Republicans.

If the bill passes legislation, proceeds from transactions conducted by marijuana companies would no longer be considered the result of unlawful activity.

“If Congress fails to act, we are discouraging responsible, regulated markets and allowing a serious public safety threat to go unaddressed,” says Heck. In last month’s hearing before a House financial subcommittee, he added that the body has the power “to prevent murders and armed robberies,” referring to the dangers these businesses face being forced to operate on a cash-only basis.

Furthermore, it’s time to look at the civil liberties issue of deeming cannabis business owners as having certain reputational risks that other businesses don’t. Because the reality is, every small business face challenges.

And barring legally recognized small businesses from financial institutions available to every other business is a threat to the liberty and freedom upon which the country was supposedly founded.

It feels like a big step backward.

Improving Transparency and Public Safety

In a nutshell, that’s what the SAFE Banking Act really aims to do.

It’s not a call out for everyone to condone marijuana businesses. It’s simply a request to create an auditable trail, while keeping neighborhoods safe.

And it’s a request we hope Congress will honor.

In the mean time, if you’re a cannabis business owner, decrease the challenges of running your business by ensuring your marketing strategy is up to snuff. Contact us today to see how we can help.

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