Today, voters in 47 states, four U.S. territories, and the District of Columbia
have spoken and legalized some form of recreational or medical marijuana, including hemp and CBD products. 97.7 % of the U.S. population live in these states. Because cannabis remains illegal under the federal Controlled Substances Act, individuals who grow, possess, use, sell, transport, or distribute cannabis remain subject to federal criminal prosecution.
Under current law, financial institutions providing banking services to legitimate and licensed cannabis businesses under state laws are subject to criminal prosecution under several federal statutes such as "aiding and abetting" a federal crime and money laundering. Therefore, businesses that legally grow, market or sell cannabis in states that have legalized its sale are generally locked out of the banking system, making it difficult for them to maintain a checking account; access credit; accept credit and debit cards; meet payroll; or pay tax revenue. This has created a significant public safety risk, as these businesses are forced to operate as cash-only businesses in an industry with billions of dollars in transactions. These high-volume cash businesses are being targeted by violent criminals and putting our communities at risk, inviting theft, robberies, burglaries, or worse, as we saw with the murders of Travis Mason in June 2016 and Michael Arthur in Portland, Oregon in December 2020.
In response, the SAFE Banking Act of 2021 seeks to harmonize federal and state law by prohibiting federal regulators from taking punitive measures against depository institutions that provide banking services to legitimate cannabis-related businesses and ancillary businesses (e.g. electricians, plumbers, landlords, etc.) that serve them. The bill establishes a safe harbor for any depository institution that chooses to provide banking services to a cannabis-related legitimate businesses which holds and maintains a license from a state or local government to engage in manufacturing, growing, or producing, as well as any business who handles, sells, transports, displays or distributes cannabis or cannabis products.
To support the economic recovery, this bill would bring more cash into the economy. As of January 2021, the legal cannabis industry supports 321,000 jobs across the country. Over the 2018-2028 period, job growth this market is projected to climb 250%, the fastest rate for any industry in the U.S. The legal U.S. cannabis market is valued at $17.7 billion, with a substantial amount unbanked. Bringing in this cash will make the industry safer and give banks and credit unions more capital to lend during the recovery.
To promote diversity and inclusion, the SAFE Banking Act requires a GAO study and annual regulator reports to Congress to monitor that there is equal access to credit and to reduce barriers to marketplace entry for potential and existing minority-owned and women-owned cannabis-related legitimate businesses.
The SAFE Banking Act passed the House by a vote of 321-103 on September 25, 2019, 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 February 2019, the SAFE Banking Act prompted the first-ever congressional hearing on the issue of cannabis banking. Click here to see the 2019 report from the House Financial Services Committee. Changes in the 117th Congress include minor technical changes to the safe harbor, strengthened hemp provisions, and other technical updates. As of April 5th, the SAFE Banking Act of 2021 was cosponsored by 140 Democrats and Republicans in the House. On March 23, 2021, the SAFE Banking Act was reintroduced in the Senate with support from nearly 30 Senators.
The SAFE Banking Act is supported by Governors from 21 states and territories as well as the below organizations:
• American Bankers Association (ABA)
• American Council of Independent Laboratories (ACIL)
• American Council of Life Insurers (ACLI)
• American Financial Services Association (AFSA)
• American Land Title Association (ALTA)
• American Property Casualty Insurance Association (APCIA)
• American Trade Association for Cannabis and Hemp (ATACH)
• Arizona Dispensaries Association (ADA)
• Association of Bermuda Insurers and Reinsurers (ABIR)
• California and Nevada Credit Union Leagues (CCUL)
• Cannabis Business Association of Illinois
• Colorado Bankers Association
• Colorado Municipal League
• Credit Union National Association (CUNA)
• Council of Insurance Agents & Brokers (CIAB)
• Electronic Transactions Association (ETA)
• Independent Community Bankers of America (ICBA)
• Independent Insurance Agents & Brokers of America (IIABA)
• Insured Retirement Institute (IRI)
• Law Enforcement Action Partnership (LEAP)
• Mountain West Credit Union Association (MWCUA)
• National Armored Car Association
• National Association of Federally-Insured Credit Unions (NAFCU)
• National Association of Mutual Insurance Companies (NAMIC)
• National Association of Professional Insurance Agents (PIA)
• National Association of Realtors
• National Association of State Treasurers (NAST)
• National Cannabis Roundtable (NCR)
• National Cannabis Industry Association (NCIA)
• National Medicinal Cannabis Coalition (NMCC)
• National Organization for the Reform of Marijuana Laws (NORML)
• Minority Cannabis Business Association (MCBA)
• Policy Center for Public Health & Safety
• Reinsurance Association of America (RAA)
• Rural County Representatives of California (RCRC)
• The Real Estate Roundtable
• United Food and Commercial Workers (UFCW)
• U.S. Cannabis Council (USCC)
• U.S. Hemp Roundtable
• Wholesale & Specialty Insurance Association (WSIA)