Time and time again, the SAFE Banking Act garnered broad bipartisan support in Congress, passing the House six times in recent years, yet failed to achieve final passage in the Senate. Now is the time to finally pass this legislation, which would prohibit federal regulators from discriminating against banks and credit unions that provide services to cannabis–related businesses. The present situation encapsulates a persistent policy failure that will only lead to a continued burden for cannabis businesses owners and consumers, even as marijuana usage is liberalized across the country.
The SAFE Banking Act has, since inception, sought to allow marijuana–adjacent firms to conduct business with financial institutions by prohibiting federal regulators from taking punitive action against banks that do business with cannabis–related ventures. At the same time, the bill would protect service providers from federal prosecution “on the basis of providing financial services to a cannabis-related legitimate business.” The bill also includes measures to prohibit banking agencies from pressuring banks into ending accounts with specific customers, which would have made initiatives like the Obama administration’s Operation Choke Point, where partisan bureaucrats from several federal agencies sought to kick certain businesses out of the financial system, illegal.
Such protections are vital to the cannabis industry’s growth, especially with the knowledge that marijuana’s vague legalization status has led many cannabis companies to operate entirely in cash, putting the safety of both entrepreneur and consumer at risk due to increased risk of robbery at business locations. This says nothing of the economic impact of excluding marijuana–related businesses. As National Organization for the Reform of Marijuana Laws (NORML) Political Director Morgan Fox has stated:
Continued inaction by the Senate on this popular bipartisan reform puts workers and customers at risk of violence, makes it harder for regulators to accurately track cannabis revenue, and perpetuates the high costs and lack of access to capital that are increasingly widening the gap between large and small businesses in the cannabis space when it comes to their chances to succeed.
Majority Leader Schumer’s willingness to disregard the SAFE Banking Act, and instead prioritize Democrat–led cannabis legislation that “directly addresses social equity” first, is certain to have widespread economic repercussions for the rapidly expanding industry. Ultimately, the SAFE Banking Act must complement any future cannabis–related legislation, regardless of broader intent, to ensure that no lawful business is denied access to American financial institutions by means of overregulation, excessive oversight, or other bureaucratic coercion.