The latest iteration of the Secure and Fair Enforcement (SAFE) Banking Act, a bill aimed at resolving financial challenges faced by the marijuana industry, took center stage at a U.S. Senate Banking Committee meeting on Thursday.
The bipartisan legislation, refiled last month by Sens. Jeff Merkley, D-Ore., and Steve Daines, R-Mont., would provide a safeguard for banks dealing with state-legal marijuana-related businesses, which currently operate in a federal legal gray area.
“The cannabis landscape looks far different than it did a few short years ago,” said Sherrod Brown, an Ohio Democrat who chairs the committee. “States and localities have established licensing and social equity programs. Banking, of course, is critical for small cannabis businesses.”
Merkley, the bill’s lead Democratic sponsor, argued that federal law has not kept pace with changes in state laws and public sentiment towards cannabis. He stated that the SAFE Banking Act would promote public safety, support small businesses, respect states’ rights, and mitigate the risk of money laundering.
Daines, the bill’s lead Republican sponsor, highlighted increased crime rates targeting state-licensed marijuana businesses, suggesting the SAFE Banking Act could address this issue. He emphasized that the act is not about federal legalization of marijuana but about improving public safety and responding to state decisions.
However, Ranking Member Tim Scott, a Republican from South Carolina, raised concerns that the legislation could inadvertently create loopholes for money laundering. Critics argued that without full decriminalization at the federal level, the act might provide a false sense of resolution while significant conflicts in federal law persist.
Industry insiders and observers generally hailed the reintroduction as a solid step forward but urged senators to take swift action.
Morgan Paxhia, managing partner, Poseidon Investment Management and $PSDN cannabis ETF: “Today was an historic day with the Senate holding its first hearing of cannabis banking reform. The industry was well represented with a professional and honest discussion about the need for SAFE Banking to be done and done promptly. The various groups have inputs that may help to further clarify the bill with a focus on a clean initiative. Opposition seems to continue with the same drug war era rhetoric that was largely refuted by members of the Senate along with industry representation. Anarchy does not reign when cannabis is legalized, obvious to the majority of Americans currently living in legal cannabis states. Today was an important step and we look to the Senate to run, not walk, with the additional steps needed to get to a vote.”
Darren Weiss, COO, Verano: “While the popularity and acceptance of cannabis increases on a bipartisan basis each year, the federal government’s outdated policies and lack of action continue to significantly hinder the industry’s growth potential. Although cannabis is one of the nation’s fastest-growing job sectors, due to federal inaction, companies are forced to conduct unsafe cash-only transactions, prevented access to critical banking resources and loans at regular rates, subjected to the punitive 280E tax provision that resulted in Verano incurring an estimated $100 million in excess taxes in 2022, and restricted from listing on U.S. stock exchanges. It’s time for elected officials in Washington to listen to the will of their constituents and take action by passing the SAFE Banking Act to enable cannabis businesses and entrepreneurs to reach their full potential.”
Saphira Galoob, executive director, National Cannabis Roundtable: “Today’s hearing showcased broad bipartisan support for this critical piece of legislation needed to normalize banking services for the state-legal cannabis industry – enhancing public safety, increasing transparency, supporting small businesses, and countering Chinese-backed investments in the illicit market that have grown due to federal inaction in this space. The hearing showcased thoughtful discussion from members on both sides of the aisle, with a consensus among witnesses that the bill could go further to be most impactful, which should include providing broader access to financial services during committee markup,”
Ed Conklin, executive director, US Cannabis Council: “Today’s Senate hearing on cannabis banking is a crucial step on the way to passing the SAFE Banking Act. The popular, bipartisan legislation would help ensure that regulated cannabis businesses, including small and minority-owned businesses, can access financial services. Banking reform would make our communities safer and our industry more equitable. We are optimistic that it will advance through regular order.”
Sean M. O’Brien, general president, Teamsters: “There are thousands of people working at cannabis proprietors in 38 states, including many who are our members. These workers deserve a safe workplace that provides meaningful wages, health care, and access to retirement security. The SAFE Banking act will allow these workers to engage in a meaningful partnership with their employer by removing archaic and non-sensical regulations that the industry is currently subjected to.”