Cannabis Banking Act Added to House Defense Bill
WASHINGTON — The bipartisan SAFE Banking Act, a measure intended to allow banks to provide financial services to legitimately licensed cannabis businesses in states that have deemed the substance legal for use, has been added as an amendment to the National Defense Authorization Act.
The NDAA, which authorizes annual appropriations for the Defense Department, is expected to pass in the House on Thursday afternoon.
The Senate is expected to take up and pass its own version of the NDAA and then the two chambers will go to conference, where it will ultimately be decided whether the SAFE Banking Act is included in the final NDAA bill.
If it does survive, it will be the culmination of a year-long effort by Rep. Ed Perlmutter, D-Colo., and others to unravel one of the toughest tangles impacting the burgeoning legal cannabis industry.
According to a release from Perlmutter’s office, voters in 47 states, four U.S. territories, and the District of Columbia have approved measures legalizing some form of recreational or medical marijuana, including hemp and CBD products.
However, cannabis still remains illegal under the federal Controlled Substances Act, making individuals who grow, possess, use, sell, transport or distribute it subject to federal criminal prosecution.
Further, Perlmutter’s release says, under the Act and several related federal statutes, financial institutions providing banking services to legitimate and licensed cannabis businesses under state laws remain subject to criminal prosecution.
Perlmutter and his co-sponsors, Steve Stiver, R-Ohio, Nydia Valazquez, D-N.Y. and Warren Davidson, R-Ohio, have argued that by locking cannabis businesses out of the banking system, effectively forcing them to be high-volume, cash-only businesses, the federal government has made them the target of violent criminals, unintentionally promoting thefts, robberies and in some cases murder in the communities in which they are located.
The sponsors of the SAFE Banking Act say their bill will harmonize federal and state law by prohibiting federal regulars from taking punitive actions against banks providing services to legitimate cannabis businesses, as well as the ancillary businesses that serve them.
Perlmutter notes that if the current cannabis banking issue is resolved, it will aid the infusion of additional money into the economy.
As of January 2021, the legal cannabis industry supported 321,000 jobs across the country, Perlmutter’s office said, and over the 2018-2028 period, job growth in this market is projected to climb 250%.
The release from the representative’s office says the legal U.S. cannabis market is currently valued at about $17.7 billion, with a substantial amount unbanked.
The sponsors of the bill also argue their legislation will prompt diversity and inclusion by providing equal access to credit and reduce barriers to marketplace entry for minority-owned and women-owned cannabis-related legitimate businesses.
If it is approved, as is expected, Thursday’s vote on the NDAA will be the fifth time the SAFE Banking Act has passed a successful vote in the House.
In April the SAFE Banking Act passed in the House on suspension by a 321-101 vote, with 106 Republicans supporting the measure. A companion bill in the Senate currently has 39 bipartisan cosponsors.
“I’ve been talking for years about the serious public safety threat that exists in our communities. The SAFE Banking Act will strengthen the security of our financial system and keep bad actors like cartels out of the cannabis industry,” Perlmutter said in a statement provided to The Well News.
“The bill continues to have overwhelming support in the House and we cannot wait any longer to address this urgent public safety issue. I look forward to working with my colleagues in the Senate to ensure inclusion of the SAFE Banking Act in the final NDAA,” he said.
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