SAFE Act Archives - Green Market Report

Debra BorchardtSeptember 22, 2021
law.jpg?fit=960%2C640&ssl=1

10min12630

The latest twist for the SAFE Act, which would provide safe harbor to banks working with cannabis companies, is that it is now in the defense policy bill. Rep. Ed Perlmutter wanted to add the SAFE Act to the defense policy bill that Congress is expected to enact into law this fall. It is one of 812 amendments that were submitted to the House Rules Committee to be included in the defense bill, but most are actually related to national defense. It was approved by the House on a voice vote. 

“This will strengthen the security of our financial system in our country by keeping bad actors like foreign cartels out of the cannabis industry. But most importantly, this amendment will reduce the risk of violent crime in our communities,” Perlmutter said on the floor ahead of the vote. “By dealing in all cash, these businesses and their employees become targets for robberies, assaults, burglaries and more.”

The language that is being put forward in the defense bill does not include capital markets access. That would mean that a new amendment would be needed and that seems unlikely. That means access to the exchanges would not improve. 

Jaret Seiberg of Cowan & Co. wrote that he believes there are significant hurdles to this happening.  Seiberg said that he thinks Perlmutter knows there is not another non-spending bill that will pass this fall and that the House often adds amendments to bills that it knows will become law. “We saw that last year with efforts to add the SAFE Act to other bills. It is rare for those amendments to survive in the Senate. Senate Banking has not approved the SAFE Act. It has not even held a hearing on the bill. That would make it highly unusual for it to get added to a broader legislative package.”

He went on to write, “We believe Democrats are not going to give up the capital markets issue without getting social justice measures added to the bill. And we don’t see how one puts social justice provisions on this package as that would then require an excise tax. And once there is an excise tax then you are addressing 280E. In short, this quickly goes from a small protection for banking to a controversial package that could sink the broader bill. Adding the SAFE Act to the defense bill would derail Senate Majority Leader Chuck  Schumer’s broader push to legalize cannabis. Comments on his bill were due this month. We believe Schumer wants to keep momentum for his effort.”

In a similar vein, Stifel’s analysts also wrote that they don’t believe anything will happen with regards to the SAFE Act. They wrote in a recent report, “Senate Majority Leader Schumer (D-NY) said he is not interested in pursuing this piecemeal solution while Senator Booker said he would do everything in his power to oppose something “making the rich richer”. Some Democrats view this as only benefiting banks, and they are unwilling to give a “win” to the industry without restorative justice, which is a bridge too far for some Republicans. Federal decriminalization and expungement would accomplish very little, given minor drug cases are handled by the states.”

 


Debra BorchardtApril 19, 2021
Capital.jpg?fit=1200%2C450&ssl=1

6min103931

Cannabis legalization advocates must be feeling a sense a deja vu. Today, the House of Representatives approved legislation (again) that would provide safe harbor for financial service providers to work with cannabis businesses that are in compliance with state laws. Called the SAFE ACT, (Secure and Fair Enforcement) Banking Act, or H.R. 1996, was reintroduced in March by Reps. Ed Perlmutter (D-CO), Steve Stivers (R-OH), Nydia Velazquez (D-NY), and Warren Davidson (R-OH), and had 177 total cosponsors by the time of the vote. The legislation was approved by a vote of 321-101, including a majority of voting Republicans.

Steve Hawkins, executive director at the Marijuana Policy Project said, “This vote marks a meaningful first step in establishing a more equitable cannabis industry and improves the likelihood that other cannabis legislation will advance at the federal level. Restricting cannabis businesses from accessing financial services creates an unnecessary burden for the industry and limits economic growth. If enacted into law, the SAFE Banking Act would strengthen efforts to increase the diversity of the cannabis industry by providing resources for those with limited access to capital and increasing the chances of success for state-level social equity initiatives. Further, it would protect the 321,000 employees directly affected by the cannabis industry’s lack of access to financial services.”

The SAFE Banking Act previously cleared the House in 2019. The language of the bill was also included in two rounds of COVID-19 relief packages that were approved by the House. This is the fourth time that the House has approved the language of the SAFE Banking Act, initially as the first standalone cannabis policy reform bill ever passed by either chamber of Congress in 2019 and two more times last year as part of pandemic relief packages that were not approved in the Senate.

“We are incredibly grateful to the bill sponsors who have been working with us for the last eight years to make this sensible legislation become law and have shepherded it through the House time and again,” said Aaron Smith, co-founder and chief executive officer of the National Cannabis Industry Association. “The SAFE Banking Act is vital for improving public safety and transparency and will improve the lives of the more than 300,000 people who work in the state-legal cannabis industry. It will also help level the playing field for small businesses and communities with limited access to capital. It is time for the Senate to start considering the companion legislation without delay.”

Advocates are hopeful that Senate Banking Committee Chair Sherrod Brown (D-OH) will take up the bill in the near future so that it can begin to move through the upper chamber as soon as possible and become law before the end of the year. The SAFE Banking Act would protect financial institutions from federal prosecution for providing banking and other services to cannabis businesses that are in compliance with state law, as well as help address serious public health and safety concerns caused by operating in predominantly cash-only environments. The legislation would improve the operational viability of small businesses by helping them reduce costs associated with lack of access to banking and increasing options for traditional lending that many small businesses in other fields rely upon. It would also mandate a study on diversity in the cannabis industry.

“For the first time since Joe Biden assumed the presidency, a supermajority of the House has voted affirmatively to recognize that the legalization and regulation of marijuana is a superior public policy to prohibition and criminalization,” said NORML Political Director Justin Strekal. “However, the SAFE Banking Act is only a first step at making sure that these state-legal markets operate safely and efficiently. The sad reality is that those who own or patronize the unbanked businesses are themselves criminals in the eyes of the federal government, which can only be addressed by removing marijuana from the list of controlled substances.”

Separate from advocacy groups, corporate cannabis was encouraged as well. Medical Marijuana, Inc. (MJNA) CEO Dr. Stuart Titus said, “Though the cannabis industry has been deemed ‘essential’ during the pandemic, it still mainly operates as a high-liability, cash-only business. We’ve been looking forward to the passage of the SAFE Banking Act for nearly a year but with Democrats now in control of the House, Senate and White House, it’s finally happened. While we have generally resolved the majority of our banking and merchant processing issues that we saw when we began selling CBD throughout the US in 2012, we have done so at tremendous ongoing legal expenses and efforts. We hope that this bill can help other leaders in the overall cannabis industry avoid such hurdles and that it leads to expanded access to cannabis, hemp and CBD across the nation. We’ve seen that the number of banks servicing cannabis businesses has decreased over the past few months and we hope that this bill encourages banks to rethink that decision.”


Choose Your News

Subscribe to the Green Market Report newsletter that gives you original content delivered straight to your inbox.

 Subscribe

We respect your privacy. See our privacy policy.


About Us

The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


READ MORE



Recent Tweets

@GreenMarketRpt – 2 days

5 Cannabis Stock Picks From Viridian

@GreenMarketRpt – 2 days

RT : AMAZING account of how consumer brands are using the psychedelic buzzword to market legal non-psychedelic products explo…

@GreenMarketRpt – 2 days

RT : Founder and managing principal of , Matt Hawkins, spoke with on primarily private-side investors in…

Back to Top

Choose Your News

Subscribe to the Green Market Report newsletter that gives you original content delivered straight to your inbox.

 Subscribe

We respect your privacy. See our privacy policy.