The Secure and Fair Enforcement (SAFE) Banking Act was reintroduced in the U.S. House and Senate on Wednesday, kicking off the 2023 Congressional debate on the most closely-watched cannabis bill.
The Act, which has cleared the House seven times over the years, protects financial institutions that provide services to state-legal cannabis businesses. Nearly half of the country has legalized cannabis for all adults and a multibillion dollar industry has taken shape, but cannabis remains federally illegal.
In the Senate, the Act is led by Jeff Merkley and Steve Daines, while in the House it is led by Dave Joyce and Earl Blumenauer. It has 38 Senate cosponsors, and eight in the House.
“For the first time, we have a path for SAFE Banking to move through the Senate Banking Committee and get a vote on the floor of the Senate,” Merkley said in a statement.
The bill got closer than ever to a Senate vote in late 2022, as Cannabis Wire reported. By the time the 11th hour negotiations ran out of steam, a package that was called “SAFE Banking Plus” also included the language of two other bills, both of which have also been reintroduced this session: the Harnessing Opportunities by Pursuing Expungement Act (HOPE Act), which would provide funding to states to pursue expungements of cannabis offenses, and the Gun Rights And Marijuana Act (GRAM Act), which would offer Second Amendment protections to legal cannabis consumers.
The text of the SAFE Banking Act is largely similar to the previous version, but with a couple of noteworthy revisions. For example, it includes protections for any entity defined as a “community development financial institution” (CDFI), which focus on underserved communities, or a “minority depository institution” (MDI), which are 51% controlled by minorities.
Since its introduction, as Cannabis Wire has reported, the SAFE Banking Act has sparked a debate among cannabis reform advocates regarding whether the Act should be advanced without first – or at the same time – advancing legislation that centers equity and justice. This debate led, in part, to the “Plus” package negotiated in the previous Congress, and is certain to factor into further revisions to the reintroduced Act.
Maritza Perez Medina, director of the Office of Federal Affairs at the Drug Policy Alliance, praised in a statement the expansion of language in the bill that requires data collection that would “measure whether banking services are being provided in a fair way.”
“While there remains much more work to be done and we remain neutral on the legislation, the changes are an encouraging sign,” Perez Medina said. “As this legislation moves forward, more should be done to lessen the barriers to entry small marijuana businesses face in obtaining commercial lending. Without this, it remains impossible for them to compete with large, multi-state operators.”
Dasheeda Dawson, Chair of the Cannabis Regulators of Color Coalition, called for the Act to “ensure that marijuana criminal records are not automatically considered a ‘red flag’ or part of what financial banking regulators consider an indication that a business may be engaged in unlawful activity,” as this would maintain a “significant barrier towards participation in state-legal marijuana industries.”
Additional stakeholder reactions are slowly rolling in. Saphira Galoob, executive director of the National Cannabis Roundtable on Wednesday called for tweaks to prop up “American entrepreneurs.”
“While we had hoped to see this year’s bill text include access to the full array of financial resources that other domestic industries—and even foreign cannabis companies—enjoy that are currently denied to domestic cannabis operators, including institutional investments and the senior exchanges, we are hopeful that this critical language will be added during the committee process,” Galoob said.
The SAFE Banking Act has attracted more lobbying interest than any other cannabis bill, as Cannabis Wire has reported. Registrations on the SAFE Banking Act have come from some of the largest financial companies and groups in the world, like American Express, PayPal, the American Bankers Association, and major insurance groups like the Nationwide Mutual Insurance Company.
