The Senate Banking Committee is gearing up to address the issue of marijuana banking with a hearing scheduled for next Thursday.
The Committee will discuss the Secure and Fair Enforcement (SAFE) Banking Act on May 11 at a meeting titled “Examining Cannabis Banking Challenges of Small Businesses and Workers.”
On Friday, Ohio Democrat Sherrod Brown indicated that lawmakers will be moving quickly on the bill.
Both Democrats and Republicans are pushing for swift action on the legislation recently reintroduced by Senators Jeff Merkley (D-OR) and Steve Daines (R-MT).
The SAFE Banking Act was first introduced in the US Congress in 2013 and has been reintroduced several times since then. The bill's primary purpose is to provide legal protection for banks and financial institutions that work with cannabis-related businesses in states where marijuana is legal.
Under current federal law, marijuana is still classified as a Schedule I drug, which means that it is illegal at the federal level. This makes it difficult for cannabis-related businesses to access banking services, such as loans, credit lines, and even simple checking and savings accounts.
Many banks are hesitant to work with cannabis-related businesses for fear of running afoul of federal laws and regulations, which has led to a situation where many cannabis-related businesses are forced to operate on a cash-only basis.
The SAFE Banking Act seeks to address this problem by creating a safe harbor for banks and financial institutions that work with cannabis-related businesses in states where marijuana is legal.
Specifically, the bill would prohibit federal regulators from penalizing banks and other financial institutions for working with cannabis-related businesses that are operating in compliance with state law. This would give banks and financial institutions the confidence they need to provide banking services to cannabis-related businesses, which would in turn make it easier for these businesses to operate legally and safely.
The SAFE Banking Act has been widely supported by a variety of stakeholders, including cannabis-related businesses, banks and financial institutions, and lawmakers from both parties.
It is seen as an important step forward in the effort to reform US cannabis policy, as it would help to normalize the legal cannabis industry and bring it into the mainstream economy. However, the bill has not yet been passed into law, and its ultimate fate remains uncertain.
As of May 2023, the Bill has been passed by the US House of Representatives as part of a broader cannabis reform package called the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, which has yet to pass the Senate.
The Senate version of the bill has not yet been introduced, but there is some indication that it could be included in a broader legislative package related to infrastructure or other priorities.
The fact that the bills have been passed by the House and have received bipartisan support suggests that there is momentum for cannabis reform in the United States, and it is possible that some version of the bills could eventually become law.
The issue of SAFE banking has become increasingly urgent as the cannabis industry continues to grow. In 2022, legal cannabis sales in the United States reached a record of approximately $30 billion (medical and adult use), and analysts predict that the industry could reach $50 billion by 2025.
The hearing on the SAFE Banking Act will be an important step in moving the legislation forward. Should it pass the Senate, it can be sent to President Biden for his signature.
It’s too early to say whether the legislation will face any significant opposition in the Senate, but advocates are hopeful that the growing momentum behind the bill will help push it across the finish line.
Unsurprisingly, most major cannabis ETFs got a lift from the news: AdvisorShares Pure Cannabis ETF was up over 4.6%, and even the Toronto Stock Exchange-listed Horizons Marijuana Life Sciences Index ETF was up 1.5% on Friday afternoon.
Here’s a look at some of the stories making news in the cannabis sector over the past few weeks: