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SAFE Banking Included in the NDAA, Passes House for Fifth Time
Washington, D.C., September 24, 2021
Tags: Jobs & the Economy
Washington, D.C. – For a fifth time, the U.S. House of Representatives last night passed H.R. 1996, the Secure and Fair Enforcement (SAFE) Banking Act of 2021, landmark legislation to reform federal cannabis laws and reduce the public safety risk in communities across the country, as part of the FY 2022 National Defense Authorization Act (NDAA). The bill would allow marijuana-related businesses in states with some form of legalized marijuana and strict regulatory structures to access the banking system. It most recently passed the House in April 2021 with overwhelming, bipartisan support by a vote of 321 to 101, including 106 Republicans.
“I’ve been talking for years about the serious public safety threat that exists in our communities. The SAFE Banking Act will strengthen the security of our financial system and keep bad actors like cartels out of the cannabis industry. The bill continues to have overwhelming support in the House and we cannot wait any longer to address this urgent public safety issue,” said Perlmutter. “I look forward to working with my colleagues in the Senate to ensure inclusion of the SAFE Banking Act in the final NDAA.”
Forty-seven states, four U.S. territories, and the District of Columbia – representing 97.7 % of the U.S. population – have legalized some form of recreational or medical marijuana, including CBD. Yet current law restricts legitimate licensed marijuana businesses from accessing banking services and products, such as depository and checking accounts, resulting in businesses operating in all cash. This is a serious public safety risk for communities, inviting theft, robberies, and burglaries. In Colorado, Travis Mason, a young father and Marine Corps Veteran, was murdered while working as a security guard for a cannabis business.
The SAFE Banking Act provides protections from money laundering laws for any proceeds derived from these state-legal marijuana businesses. This will get cash off the streets and into the financial system which is built to root out fraud and illicit activity. Under FinCEN’s 2014 guidance regarding marijuana-related businesses, financial institutions must comply with a heightened anti-money laundering reporting regime which will help keep bad actors out of the cannabis industry and the financial system. Testimony from a law enforcement official during a House Financial Services hearing on cannabis banking in February 2019 reiterated the importance of bringing the cash from the cannabis industry into the banking system.
The cannabis industry also employs and serves a growing number of Veterans. Many Veterans use medical cannabis to treat post-traumatic stress, traumatic brain injuries, anxiety and other combat wounds or disorders. Medical cannabis dispensaries face the same banking challenges and consequent dangers of working in a cash-only system.
The U.S. cannabis industry continues to grow at a rapid rate, with the current value estimated at $17.7 billion, a substantial amount of which remains unbanked. As of January 2021, the legal cannabis industry supports 321,000 jobs across the country. Over the 2018-2028 period, job growth in this market is projected to climb 250%, the fastest rate for any sector in the U.S. Bringing in this cash will make the industry safer and give banks and credit unions more capital to lend during the economic recovery as a result of the COVID-19 pandemic.
In the 116th Congress, the SAFE Banking Act passed the U.S. House with a broad bipartisan vote of 321 to 103, with 91 Republicans and one Independent voting in support. The bill also passed as part of the Heroes Act, an earlier COVID relief package which was approved by the House on two separate occasions in 2020. On March 23, 2021, Senators Merkley and Daines introduced the SAFE Banking Act in the Senate and it currently has bipartisan support from 39 Senators. The SAFE Banking Act of 2021 is supported by a wide variety of organizations, including the recent endorsement of the National Association of State Treasurers and Governors from 21 states and territories. See the full list of supporters and additional background information at here.