The U.S. House of Representatives voted on Wednesday to approve a bill that would allow legal cannabis businesses access to the nation’s banking system. The measure, the Secure and Fair Enforcement (SAFE) Banking Act, was passed with a House floor vote by a margin of 321 to 103. Nearly half of the Republican caucus joined their Democratic colleagues in voting for the bill. Only one Democrat, Rep. Terri Sewell of Alabama, voted no.
This was the first-ever vote on a stand-alone cannabis bill –and it passed the Democratic- controlled chamber by a 321-103 vote and on bipartisan lines, as 229 Democrats, 91 Republicans and one independent voted for it, while 102 Republicans and one Democrat voted no. The bill aims to give clarification to banks and credit unions that serve cannabis companies with, for instance, business accounts for bill paying. Currently, financial institutions face legal problems because marijuana remains illegal on the federal level, even as more states legalize it. Lobbyists have emphasized that many cannabis businesses end up “unbanked” and operating largely in cash, and that makes them targets for robberies and other crimes.
“This must be a first step toward the decriminalization and de-scheduling of marijuana.”
Majority Leader Rep. Steny Hoyer
Rob Nichols, president and CEO of the American Bankers Association, and Jim Nussle, president and CEO of the Credit Union National Association, in an opinion piece for FOX Business, argued for the bill noting,
“Passing the SAFE Banking Act would mark a step forward for public safety in this country and would give financial institutions the certainty they need to fully support their communities. It would also demonstrate that Congress can still come together to solve the nation’s challenges.”
Justin Strekal, the political director for the National Organization for the Reform of Marijuana Laws (NORML), noted the historical significance of Wednesday’s vote in the House.
“For the first time ever, a supermajority of the House voted affirmatively to recognize that the legalization and regulation of marijuana is a superior public policy to prohibition and criminalization.”
Steve Hawkins, the executive director of cannabis policy reform group the Marijuana Policy Project, noted that passage of the bill will result in greater opportunities for entrepreneurs seeking licensure under state and local social equity programs.
“It is important to recognize that the SAFE Banking Act, if passed by the Senate and signed into law by the President, would strengthen efforts to increase the diversity of the cannabis industry,” he said.
“Many states that have legalized cannabis for adults have launched efforts to ensure that there are economic opportunities for communities of color that have been most severely impacted by marijuana prohibition,” Hawkins added. “Access to capital remains an obstacle to this goal, and the SAFE Banking Act would help to address this problem.”
Aaron Smith, the executive director of the National Cannabis Industry Association, called on senators to follow the House’s lead.
“Now, it’s time for the Senate to take swift action to approve the SAFE Banking Act so that this commonsense legislation can make its way to the President’s desk,” said Smith. “This bipartisan legislation is vital to protecting public safety, fostering transparency, and leveling the playing field for small businesses in the growing number of states with successful cannabis programs.”
Neal Levine, the CEO of industry group the Cannabis Trade Federation, called on lawmakers to quickly pass the bill into law.
“This is a serious public safety matter that needs to be addressed by Congress this session,” Levine said. “It is only going to grow in urgency and magnitude as states continue to roll back cannabis prohibition policies. Enacting the SAFE Banking Act would greatly bolster states’ efforts to promote safety, regulatory compliance, and equity within the cannabis industry. Cannabis-related companies are lawfully operating in states around the country, and they deserve the same access to banking that is afforded to every other type of lawful business.”
At the other end of the political spectrum, the bill had faced opposition ahead of Wednesday’s House vote from several progressive groups, such as the Center for American Progress, the American Civil Liberties Union and others. In a letter to top House Democrats, the groups criticized the efforts to advance a bill that just addresses banking issues, but does not help “communities who have felt the brunt of prohibition,” yet have been “shut out” of the growing industry. Their concerns didn’t end up stopping the House from passing the measure.
Some analysts are warning that the measure isn’t likely to become law in 2019 as it faces a tough road in the Republican-controlled Senate.
The chances of enactment this year for the bill have risen to 1 in 3, up from 1 in 5, reckons Ian Katz, an analyst at Capital Alpha Partners. Those still aren’t great odds, however. “We remain skeptical for now,” Katz said in a note before the House vote, though he added that the chances could get better “if we see meaningful signals from the Senate in the next few weeks.”
“I’m fairly confident that either the SAFE Act or STATES Act will be passed,” said Rob DiPisa, co-chair of law firm Cole Schotz’s Cannabis Law Group.
“I think the industry has come too far. The cat’s out of the bag, and it’s not going to disappear, so banking needs to happen.”
The STATES Act — whose full name is the Strengthening the Tenth Amendment Through Entrusting States Act — would create protections for U.S. states that have legalized cannabis for medical or recreational use. Another measure, the Marijuana Justice Act, would go further, ending the federal prohibition of the drug and expunging the records of people who have served time for marijuana use and possession.