Cannabis companies doing legal business in their state are one step closer to potentially opening accounts with federally-insured banks after the latest version of the SAFER Banking Act (formerly SAFE banking) cleared the Senate Banking Committee Wednesday 14-9.

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The Secure and Fair Enforcement Regulation Banking Act will now move to the Senate Floor for where it faces several more hurdles and potential amendments before a full vote can be made. If passed by the Senate it moves to the Republican-controlled House of Representatives.

“Cannabis banking is just one part of the necessary conversation about marijuana policy. There is still much work to be done to acknowledge and mend the damage done by the war on drugs, work to make sure everyone – including our veterans – has access to the medicine they need and allow medical and scientific research on cannabis,” said Senate Banking Committee Chairman Sen. Sherrod Brown, D-Ohio in a press release.

SAFER Banking would provide much-needed legal protections for financial institutions to serve businesses in the currently cash-dependent cannabis trade. Cannabis is presently considered a Schedule 1 substance in the eyes of the federal government, which means any bank that wishes to be federally insured cannot do business with cannabis companies, regardless of the laws in that company’s home state. If the Senate passes the SAFER Banking Act, it will allow cannabis businesses to not only open bank accounts, but take out small business loans, accept debit cards as payment and provide easier pathways for their employees to get home loans etc. 

The latest language of the bill was submitted for consideration last week written and led by senators Jeff Merkley, D-Ore.; Steve Daines, R-Mont.; Kyrsten Sinema, I-Ariz.; and Cynthia Lummis, R-Wyo., as well as Majority Leader Chuck Schumer, D-N.Y.

“This legislation will help make our communities and small businesses safer by giving legal cannabis businesses access to traditional financial institutions, including bank accounts and small business loans,” the senators said in a joint statement. “It also prevents federal bank regulators from ordering a bank or credit union to close an account based on reputational risk.”

If passed, SAFER Banking may provide a much needed lifeline for an industry forced to do business in cash which puts thousands of budtenders, delivery drivers, growers and other ancillary cannabis sector employees at risk of violent crime. It would also provide much-needed capital for businesses currently forced to operate using their own money or capital secured through private sources.

Seven previous versions of the bill were passed by the House of Representatives but have thus far been unable to progress to a full Senate vote until Wednesday’s developments, though the bill still faces heavy opposition from Senate Republicans and from the GOP-controlled House if passed by the Senate. Opponents of the bill said, among the usual laundry list of concerns about cannabis, that the language of the bill only further serviced the wealthy and did nothing for criminal justice reform. 

“This bill will make life safer for bankers, for businesses and financial institutions, some of whom have been profiting from the cannabis industry illegally for years, which is ironic given many of the regular folks who illegally sold or used cannabis are sitting in jail cells right now,” said Senator Raphael Warnock, D – GA.

The advancement of the SAFER Banking Act marks the latest in a series of movements at the federal level concerning cannabis, including a recommendation by the Department of Health and Human Services that cannabis be rescheduled from Schedule 1 to Schedule 3. That decision has now been handed off to the DEA to weigh in on. A congressional report released last week said the DEA was “likely” to recommend the same, though an additional bill has also been introduced in the Senate, which if passed would require congressional approval before cannabis can be rescheduled. 

All this comes on the heels of a potential government shutdown sparked by a congressional standoff regarding a new spending bill that could further delay progress on all of these matters. Senator Schumer said he would work to bring the SAFER Banking Act to a floor vote as soon as possible where it requires 60 votes to move on to the House of Representatives.

“Regardless of how you feel about states’ efforts to legalize marijuana, this bipartisan bill is necessary – it will make it safer for legal cannabis businesses and service providers to operate in their communities and protect their workers,” said Sen. Brown. “Through bipartisan work we have been able to find language that addresses both Republicans’ and Democrats’ concerns.”

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