As the tide towards legalizing Cannabis gathers momentum, Congress is taking the first of many steps to decriminalize the infrastructure of the cannabis trade.
The House on April 20th announced that they had had passed the Secure and Fair Enforcement Banking Act of 2021, or the SAFE Banking Act of 2021 by a 321-101 vote. In the past, with cannabis being a class 1 drug, the same category as narcotics such as heroin, banks weren’t allowed to handle money from cannabis businesses. This created the need for cash only transactions which could be stolen or lost and created headaches with payroll. The bill would prohibit federal banking regulators from penalizing banks and other depository institutions for providing banking services to cannabis businesses. This means that the banks that are backed by the Federal Deposit Insurance Commission (FDIC) will not have to worry about the substantial penalties associated with dealing with Cannabis/ The bill is now expected to be taken up by the evenly split Senate before it can reach the President’s desk.
The American Property Casualty Insurance Association lauded the news and urged the Senate to act. “APCIA commends the House for providing greater certainty surrounding the insurance marketplace for cannabis-related legal businesses and consumers adhering to state laws. This legislation addresses the legal uncertainty created by the dueling state and federal treatment of cannabis. While marijuana is illegal under the federal law, thirty-six states and the District of Columbia have legalized some form of marijuana.
In addition to the support by various insurance agencies, a group of governors, led by New York Governor Andrew Cuomo have expressed support for SAFE Banking Act. Jared Polis, Governor of Colorado, the first state to legalize recreational cannabis was happy at the support. “I’m proud that my fellow Governors and I are urging Congress to make the common-sense decision to allow state-licensed cannabis-related businesses to have normal bank accounts,” Gov. Polis commented on the effort. “For more than a decade, Colorado has been a model of the success of these businesses and it’s well past time that we allow them to join our banking system. I want to thank Rep. Ed Perlmutter for his tireless efforts and years of dedication on this issue.”
This is not the only bill that is being considered that affects coverage for cannabis dealers in Congress at the present. The Clarifying Law Around Insurance of Marijuana Act of 2021, which has bipartisan support, could help open insurance markets for cannabis operators and companies in their supply chains, they say.
Until these laws are passed, companies must continue to observe what the state laws are for cannabis and how they conduct business. While the hope is to have a federal consistency eventually, it will continue to be slow progress that will speed up as more states legalize it.