A bipartisan group of senators advanced a landmark cannabis financing bill that would give legal protection to banks that take marijuana companies on as clients.
The Secure and Fair Enforcement Regulation Banking Act, or SAFER Banking Act, which was sponsored by Sens. Jeff Merkley (D-OR) and Steve Daines (R-MT), passed in a 14-9 vote in the Senate Banking Committee on Wednesday. The legislation will be sent to the Senate floor.
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“Regardless of how you feel about states’ efforts to legalize marijuana, this bipartisan bill is necessary,” Sen. Sherrod Brown (D-OH) said. “It will make it safer for legal cannabis businesses and service providers to operate, to protect their workers first and foremost, and to operate in their communities.”
Marijuana is a Schedule I drug under federal law, so companies in states where the substance has been legalized haven’t been able to access traditional banking services. This legislation would give banks legal cover to start providing financial services to growers and dispensaries, a major ask by the cannabis industry.
Currently, cannabis companies are forced to deal in cash, which makes them ripe for tax evasion and targets for theft.
Daines said during the Wednesday markup that despite sponsoring the legislation, he doesn’t support legalizing marijuana at the federal level. Rather, he couched his support in the notion that legal businesses should be able to have access to banking services instead of being forced into the cash model.
“This bill is about public safety first and foremost,” Daines told the committee. “The current all-cash model of legal cannabis businesses makes them targets for theft, for tax evasion, and for organized crime. The key to addressing this risk is by ensuring all legal businesses have access to the banking system.”
The committee rejected an amendment by Sen. Raphael Warnock (D-GA), concerned about racial equity as it relates to the war on drugs, that would have sunset the SAFER Banking Act after five years unless it was proven the legislation reduced the racial wealth gap.
Should the SAFER Banking Act become law, it would mark a historic shift for the cannabis industry amid a broader push at the federal level to loosen marijuana restrictions.
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Last month, it was revealed the Department of Health and Human Services recommended that the Drug Enforcement Administration move marijuana from a Schedule I-listed drug to Schedule III under the Controlled Substances Act. The move would be a boon for marijuana companies that have been pushing for marijuana to be delisted or at least downgraded.
Additionally, since being sworn into office, President Joe Biden has granted a pardon to all people who were federally convicted of simple marijuana possession.
