On April 27, 2017, a bipartisan group of congressmen in the United States House of Representatives announced that it would be launching legislation to allow state-legal marijuana businesses access to banking services.
There are currently 29 U.S. states that have legalized medical marijuana and eight states, plus Washington, D.C., that allow the use of recreational marijuana. While businesses are growing and generating more revenue, owners are still forced to operate as cash-only businesses because banks are wary to start a relationship with an industry that is illegal federally. This means the majority of marijuana businesses cannot use checks to pay taxes or pay employees, nor can they take credit cards.
Under the Secure and Fair Enforcement Banking Act, also known as the SAFE Banking Act, banks would be able to work with marijuana businesses without being reprimanded by the federal government.
Rep. Don Young, R-Alaska, co-founder of the Congressional Cannabis Caucus, joined the bipartisan group as “one of [his] top priorities is ensuring marijuana-related businesses have access to the banking system and can operate in accordance with state law.”
If passed, the Safe Banking Act would create a safer environment for marijuana businesses that are currently at risk due to the cash-only nature of the industry.
“Allowing tightly regulated marijuana businesses the ability to access the banking system will help reduce the threat of crime, robbery and assault in our communities and keep the cash out of cartels,” said Rep. Ed Perlmutter, D-Colo.
The Safe Banking Act would act as a “safe harbor” for marijuana businesses working with banking systems.
Rep. Denny Heck, D-Wash., another sponsor of the bill, is concerned about what cash-only businesses mean for the legitimization of the industry. “Nearly a quarter of the U.S. population now lives in a place where adult use is legal. And yet because of these federal restrictions, cash will continue to reign just as it did on the black market,” Heck said.
If the bill goes through, federal banking regulators would be prohibited from downgrading loans or forcing banks to end their relationships with marijuana businesses.
The Senate should see the introduction of a related companion bill later this month.