In a bipartisan vote, the U.S. House of Representatives has approved new federal rules that allow legal cannabis businesses to access commercial banks.
The House voted to approve what’s known as the "Secure and Fair Enforcement Banking Act," or "SAFE Act." Monday’s vote was 321 for to 101 against and included support from a majority of Republicans. The legislation now heads to the U.S. Senate, which is where previous cannabis reform bills have been killed.
Cannabis use is now legal in 47 U.S. states, with four more states, including New York and New Jersey, on the verge of legalization. However, to date, major bank and credit unions have been unable to accept business from legal cannabis companies or they risk federal prosecution or financial penalties.
The practical effect has been a legal cannabis industry that’s worth billions of dollars forced to conduct transactions entirely in cash, including paying state and federal taxes in cash, an arrangement that critics say is unfair and unsafe.
The SAFE Act clarifies that transactions involving "legitimate cannabis-related businesses" are not subject to anti-money laundering laws and that banks won’t run afoul of asset forfeiture proceedings for handling legal cannabis business’s accounts.
Now the legislation moves to the U.S. Senate, where, despite the promise of Majority Democratic Leader Chuck Schumer that cannabis legalization will happen, cannabis banking faces an uphill battle.
However, it seems likely that the SAFE Banking Act will at least get a hearing in the U.S. Senate. The chairman of the Senate Banking Committee is Senator Sherrod Brown, an Ohio Democrat whose state has a medical-marijuana industry.
