SAFE Banking Act removed from Chinese competition law

Federal laws that would allow financial institutions to offer banking services to legal cannabis companies have been scraped from a bill intended to encourage competition with China. This is the sixth time that the Cannabis Bank Rules have not received approval from the US Senate after being passed in the House of Representatives.

Known as the Secure and Fair Enforcement (SAFE) Banking Act, the legislation would have allowed banks and other financial institutions to serve businesses in the legal cannabis industry. Under current regulations, the federal government tightly regulates the provision of traditional banking services like loans and payroll, checking, and deposit accounts, resulting in few financial institutions agreeing to work with marijuana companies. Critics point out that current policies are forcing cannabis companies to operate primarily with cash, leaving the businesses vulnerable to crime.

The SAFE Banking Act was first introduced into Congress in 2013 by Democratic Rep. Ed Perlmutter of Colorado. Since then, the House of Representatives has passed the bill six times, either as a standalone bill or as an annex to other bills. But the measure failed to get Senate approval.

Most recently, in February, the House of Representatives approved provisions of the SAFE Banking Act as part of the America Creating Opportunities for Manufacturing, Pre-Eminence in Technology, and Economic Strength Act of 2022 (America COMPETES Act), a bill to support and improve US manufacturing competitiveness China. But on Thursday, Punchbowl News reported that the cannabis banking provisions were scraped from the latest version of the COMPETES Act, which is currently in the conference committee with House and Senate legislators. The report noted that the language of the SAFE law had been dropped at the urging of Republican negotiators.

“In the wake of Senate inaction, people continue to be killed, businesses continue to be robbed, and employees and business owners in the cannabis industry continue to be shut out of the financial system,” Perlmutter, the lead sponsor of the SAFE Banking Act, said in a statement cited by The Hill.

Activists and industry react

Following the news that the legislation was not included in the latest version of the COMPETES Act, Morgan Fox, the policy director of the National Organization for the Reform of Marijuana Laws (NORML), said it is “stunning that this is now the case sixth time SAFE Banking approved by House but stalled by Senate.”

“This tight-knit, incremental and necessary legislation has broad bipartisan support in both houses, and it is incredibly disappointing that politics continues to stand in the way of saving lives and supporting small businesses struggling to disrupt and ultimately replace the underground cannabis market Fox said in a statement from the cannabis policy reform advocacy group. “If there is a legal version of the Twilight Zone, the SAFE Banking Act seems stuck at this point.”

Some supporters of the legislation, including Michael Sassano, CEO and founder of cannabis products maker Somaí Pharmaceuticals, believe Congress is missing an opportunity to make people working in the industry safer.

“Congress keeps dropping the easy game by opting for an all-or-nothing strategy,” Sassano wrote in an email to High Times. “Avoiding the SAFE banking law just shows that they don’t care about the cannabis industry and the safety of our employees, they care about their pet projects that get embedded in every failed law they try and pass.”

Despite Thursday’s backlash, representatives from the regulated cannabis industry have not abandoned the Cannabis Bank Act in hopes that lawmakers will add the legislation to an upcoming spending package.

“The support and political will is there to get the SAFE Banking Act across the finish line. We are encouraged by discussions about combining the bill with other helpful cannabis and criminal justice reforms,” ​​Steven Hawkins, president of the US Cannabis Council, said in a statement. “We look forward to working with our members and allies to get the job done.”

However, Fox noted that the opportunity to pass significant federal cannabis reform this year is fading as the nation and Congress head into the 2022 midterm election season.

“There are still some ways to get SAFE Banking approved in the current session of Congress, but time is running out,” Fox added. “The Senate should not waste this rare opportunity for bicameral and bipartisan cooperation that would improve security and opportunity for hundreds of thousands of people and promote economic development in a majority of states.”

Perlmutter, who announced in January that he would not be running for re-election this year, vowed to keep working to get the cannabis banking measure passed before he leaves Congress.

“I will continue to push for #SAFEBanking to be included in CONTESTS, other legislative instruments, or for the Senate to finally take up the stand alone version of the bill that has been sitting in the Senate for three and a half years,” Perlmutter tweeted Thursday.