Advocates Cautiously Optimistic on Cannabis Banking Reform

By Willis Jacobson
Sep 29, 2020

The latest pandemic stimulus package proposal includes a section that would open the commercial cannabis industry to federally-backed banks and other financial institutions. 

Advocates of the measure are hopeful the third time proves to be a charm.

On Monday, House Democrats unveiled a $2.2T COVID-19 relief bill that Congress could vote on as soon as this week. Although the bill is a mostly pared down version of an unsuccessful $3.4T relief plan the House approved in May – the Senate declined to vote on it – it maintains the Secure and Fair Enforcement, or SAFE, Banking Act.

If adopted, it would create avenues for state-legal cannabis companies to access traditional banks. Currently, cannabis operators are mostly blocked from the financial system due to marijuana’s federal illegality.


The bill has been approved twice by the House since last September, but has yet to be voted on by the Republican-controlled Senate. Some in and around the cannabis industry are cautiously optimistic that this latest push – occurring in the lead-up to the Nov. 3 election, while being tied to a coronavirus relief package – could provide the ideal conditions for success.

“There’s incredible pressure on Congress to come to some sort of an agreement as soon as possible, because the American people are hurting right now financially,” said Morgan Fox, a spokesman for the National Cannabis Industry Association (NCIA), which represents thousands of cannabis businesses and workers. “I think both parties realize how damaging it’s going to be coming into the election if they can’t put aside their differences and actually help their constituents.”

‘The very least they can do’

The SAFE Banking Act’s previous incarnations have received bi-partisan support. But the Democrats’ broader stimulus proposal is likely to face opposition if it reaches the Senate. Legalization advocates and political pundits have mostly pointed to partisan bickering and non-cannabis concerns as the reasons for the Senate’s prior inaction on the legislation.

Fox said he didn’t think the SAFE Banking Act would be a “poison pill” for the Senate if this newest proposal does make it to the upper chamber. 

“Despite some of the things that some Republicans have been saying, there really isn’t a whole lot of opposition to including this language in a coronavirus relief package,” he said. “The question is whether or not the GOP and the Democrats will be able to come to some sort of an agreement, and that’s going to be based largely on non-cannabis issues.”

By making banking available for canna-businesses, supporters argue, the bill would cut down on the amount of cash carried by workers and customers, leaving both groups less susceptible to theft and physical attacks. Furthermore, businesses could be run more efficiently and be more easily audited if they are able to obtain bank accounts, process credit cards and become eligible for various types of loans.

Justin Strekal, political director for advocacy group NORML, called the inclusion of the SAFE Banking Act in the latest House proposal a “positive development.”

“In the majority of states that regulate the marijuana marketplace, cannabis businesses have been deemed essential during this pandemic,” he said. “Unfortunately, at the federal level, prohibition compounds the problems that this emerging industry faces. Small cannabis businesses in particular are facing tough economic times and access to traditional financial tools will help ensure that they can weather this pandemic.”

Fox said he and others at the NCIA have been working privately with some Senate Republicans since December to address some of their concerns with cannabis banking reform.

The fact that cannabis businesses are ineligible for other federal pandemic-related business supports, like Paycheck Protection Program and Small Business Administration loans, makes the SAFE Banking Act especially critical, Fox said.

“If Congress is pretty much unwilling to allow cannabis businesses to get other forms of federal aid, the very least they can do is allow access to banking services and traditional lending,” he said. 

The SAFE Banking Act has been publicly endorsed by all 50 states’ bankers associations. The individual associations supported the measure by signing a March letter to the chairs of the Senate Banking, Housing and Urban Affairs Committee.

“Although there are admittedly broader public policy questions at play, we ask that you evaluate and address this pressing banking problem, which is within your power to resolve,” the letter concluded. “Doing so will reap immediate public safety, tax and regulatory benefits while Congress continues to grapple with broader decisions about national drug policy.”

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