(Nov. 12, 2021) A bipartisan group of 24 governors and other top officials called on the Congress this week to include the SAFE Banking Act – legislation supported by the state system to provide clarity to financial institutions seeking to serve legitimate cannabis businesses – as an amendment to the military funding bill now pending in Congress.
The governors, territorial leaders and the mayor of the District of Columbia – 20 Democrats and four Republicans – said the SAFE Banking Act has “more bipartisan support than ever before.”
The legislation has passed the House but has not been taken up in the Senate. It would provide a safe harbor for credit unions and banks serving cannabis businesses in states where it is legal. More than 35 states have legalized cannabis for medical or adult use. However, federal law prohibits credit unions and banks from safely banking cannabis businesses, including those that provide them with goods and services.
The state and territorial leaders argued that the bill should be added to the National Defense Authorization Act (NDAA), must-pass legislation by year’s end to essentially keep the military funded. The House has added the provision to its version of the NDAA; the Senate has not yet acted. The state leaders wrote that the issue was one of public safety.
“Medical and recreational cannabis sales in the U.S. were estimated to total $17.5 billion last year, but because of antiquated federal banking regulations, almost all cannabis transactions are cash-based,” the leaders wrote. “Not only are cash-only businesses targets for crime, cannabis businesses are further disadvantaged compared to other legal businesses by being unable to open bank accounts or obtain loans at reasonable rates. The cannabis industry is legal in some form in the majority of U.S. states and it is too large of a market to be prohibited from banking opportunities.”