On September 27, 2023 the cannabis industry was all a buzz after a significant step forward toward seeing banking reform was announced. In a 14-9 vote, the Senate Banking Committee approved the Secure and Fair Enforcement Regulation (SAFER) Banking Act to be sent to the Senate floor. Previous versions of the SAFE Banking Act passed the House seven times but have never received support to be moved forward.
The bill will enable legal cannabis businesses to have access to banks and financial institutions that have previously been off-limits. In addition, the bill will prevent federal regulators from forcing banks to close accounts for legal cannabis business without “valid reason” or denying banking based on “personal beliefs or political motivations,” as well as require uniform guidance and examination procedures for depository institutions that provide financial services to state-sanctioned cannabis businesses. Progression of the bill could be impacted by the potential government shutdown on October 1st as a political battle is underway between the Democrat-controlled Senate and the Republican-controlled House of Representatives.
To date, 40 states and the District of Columbia have legalized cannabis for recreational and/or medical use, however, the industry has struggled with limited access to financial markets due to the Schedule I classification. Regardless of personal opinions on legalization, many believe the bill is necessary to eliminate the public safety risk associated with the all-cash nature of the cannabis industry.
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If your all-cash cannabis business is seeking industry expertise, look no further. Reach out to Withum’s Cannabis Sector Services Team.
