On Sept. 25, the US House of Representatives passed The Secure and Fair Enforcement (SAFE) Banking Act of 2019, now opening an avenue for banks to work with legal cannabis businesses safely.
This was the first time a standalone cannabis bill at the federal level was voted on the house floor, 321 - 103 votes, according to Culture Magazine.
The SAFE bill will protect banks supporting cannabis businesses from criminal prosecution and other consequences. Banks have been weary working with cannabis businesses in fear of repercussions. This is why most cannabis businesses rely on cash only.
There are no laws stating banks cannot work with cannabis businesses, however, the banks must report suspicious or illegal activity. This could involve legal cannabis businesses if their income seems 'suspicious.'
Banks were in a grey area when it came to supporting cannabis businesses since marijuana remains federally illegal. Since the sale of cannabis is illegal, any money made from dispensaries then sent to a bank could be considered laundering which in turn could end in the bank being criminally prosecuted.
Before this bill only about 1 in 30 banks in the US would work with cannabis businesses. These banks would in turn charge high monthly rates and fees due to the risk.
With the new bill the cannabis industry won't suffer such prejudices as they have since the beginning of marijuana legalization. More businesses can now grow without the need of cash in hand but rather borrow from a bank like any other business. This can help so many businesses grow to a larger capacity and make it easier to start new ventures in the industry.
The SAFE bill will change the game for the cannabis industry. This is just another step in the right direction for legal cannabis businesses to prosper.