As we all know, the cannabis business is booming; but the laws governing oversight in this industry are extremely slow to catch up. One of the biggest pressure points in regards to this is financial services. Because banks are federally regulated, and cannabis is considered a schedule one drug on a federal level, banks can’t and won’t touch proceeds from canna-businesses because of Anti-Money Laundering (AML) laws and compliance expectations that apply under the Bank Secrecy Act (BSA). The SAFE Banking Act, which was introduced by Congressmen Ed Perlmutter (D-CO) and Denny Heck (D-WA) might be the solution we’ve all been looking for. The Act is cosponsored by 165 members of the House which is more than any cannabis reform legislation to date and has moved on to the Senate for approval.

“Lack of access to financial services is creating public safety problems for the rapidly growing legal cannabis industry, as well as interfering with transparency and access to capital for small businesses,” said Aaron Smith, Executive Director of the National Cannabis Industry Association. “The Senate now has the opportunity to keep up the momentum that the SAFE Banking Act has in the House and address this important issue.”
Several amendments were proposed, considered, and even passed before going to the Senate, these were some of the most notable:

• Additions requiring the federal government to study diversity and inclusion in the marijuana industry: this would require federal regulators to conduct studies and provide annual reports “tracking information and data on the availability of access to financial services for minority-owned and women-owned cannabis-related legitimate businesses” (Rep. Ed Perlmutter (D-CO))

• Additions requiring the Government Accountability Office to study banks’ previous reports on their marijuana business customers to understand how effective they are in identifying bad actors, passed via voice vote (Rep. Scott Tipton (R-CO))

• Extension of protections to “de novo” banking institutions that seek charters or master accounts from a Federal Reserve bank, passed via voice vote (Rep. Katie Porter (D-CA))

• Expansion of protections to insurance companies passed via voice vote (Rep. Steve Stivers (R-OH))

• Delay of the bill’s effective date until marijuana is federally de-scheduled, withdrawn (Rep. Bill Huizenga (R-MI))

• Delay of the bill’s enactment until federal regulators are able to issue guidance to banks, defeated via voice vote and roll call vote 35-25 (Rep. Bill Huizenga (R-MI))

• Limitation of the bill to only protect hemp businesses defeated via voice vote and roll call vote 42-18 (Rep. Andy Barr (R-KY))\

• Withdrawal of protections from banks that serve marijuana businesses located within 1,000 feet of schools, youth centers, public parks, child care facilities, public housing, civic centers or designated drug-free zones, defeated via voice vote and roll call vote 34-26 (Rep. Sean Duffy (R-WI)).*


Will it Pass?

As we wait for the SAFE banking act to gain placement on the calendar for a floor vote, key Republicans are making it clear things might not be so easy. The Republican chairman of the Senate, Mike Crapo (R-Idaho) hints that his panel may not take up a bipartisan bill to shield banks that service the cannabis industry. He says he will not commit to granting the legislation a hearing.

“As long as cannabis is illegal under federal law, it seems to me to be difficult for us to resolve this. This is something that the Department of Justice deals with before congressional action,” said the Chairman. “I cannot make a commitment as to whether we will take up legislation yet because we want to see how we can resolve this difference between criminal law and our financial law.”

Crapo made these comments during a conference for the Independent Community Bankers of America (ICBA) according to Politico. This comment goes against ICBA’s own policies, as they believe “Advocating federal legislation establishing a safe harbor from federal sanctions for banks that service cannabis-related businesses in states where cannabis is legal under state law.”

What Does it Mean for the Future of Cannabis?

Even if the Safe Banking Act doesn’t pass, the symbolism may be more important. With new legislation such as the Farm Bill and the Regulate Marijuana Like Alcohol Act, it’s proof our country is becoming much more receptive to legalization on a federal level. Hopefully, the Regulate Marijuana Like Alcohol Act (H.R. 420) gains more traction as it’s one of the most popular cannabis reform legislation to hit Congress to date.

H.R. 420 would allow marijuana businesses to access the banking system and also grant access to certain researching of marijuana which was previously impossible. More importantly, it would pass responsibility from the Drug Enforcement Agency to the Alcohol, Tobacco, Firearms, and Explosives for regulation. Just like the act states, we would de-schedule marijuana and treat it more like alcohol.

A press release from U.S. Rep. Earl Blumenauer (D-Oregon), who is the founded the Congressional Cannabis Caucus, says that “while the bill number may be a bit tongue in cheek, the issue is very serious.”

“Our federal marijuana laws are outdated, out of touch and have negatively impacted countless lives,” Blumenauer is quoted as saying by the publication. “Congress cannot continue to be out of touch with a movement that a growing majority of Americans support. It’s time to end this senseless prohibition.”* SVBS


In 2015, Joshua Warihay started with Vapor Outlet as a sales rep before the company merged with Windship Trading. In his first year, he sold just under half a million dollars in product working part-time as a sales representative. He now heads up the marketing department as Windship’s Director of Marketing and looks forward to using his position to set a new standard in the industry. For inquiries please email [email protected] or call 512-216-628.