House of Representatives Set to Vote on SAFE Banking Act Today

Cannabis Sep 25, 2019 Denver, CO

By: Nabil Rodriguez, Esq. & Allen Paxton*

UPDATE: It passed! Read our latest post on what’s next for the Bill.

The U.S. House of Representatives is expected to vote soon on the Secure and Fair Enforcement Banking Act of 2019 (the “SAFE Banking Act”) today. As a recap, the SAFE Banking Act would shield banking institutions that serve cannabis-related businesses from federal penalties in states where the cultivation, production, manufacturing, sale, transportation, dispensing, and distribution of cannabis is legal.

The SAFE Banking Act would: (i) prevent federal banking regulators from halting banks’ services or punishing banks for providing services to cannabis-related businesses that are in compliance with state laws; (ii) protect ancillary businesses in the cannabis industry from money laundering charges and other financial crimes; and (iii) require the Federal Financial Institutions Examination Council (“FFIEC”) to develop guidance to help financial institutions understand how to serve cannabis businesses.

Because marijuana (or “marihuana” under the Controlled Substances Act) is federally illegal, banking institutions currently face potential repercussions and federal sanctions by working with those in the cannabis industry. In light of these concerns, most banks have denied cannabis-related businesses access to bank accounts and other financial services. As a result, many marijuana businesses have remained cash-only. As cash-only businesses, many cannabis businesses become possible targets for theft. By allowing banks to provide services to the cannabis industry, the SAFE Banking Act aims to increase public safety by reducing the amount of cash at a marijuana business.

As a related side note on hemp, although the Agricultural Improvement Act of 2018 (the “2018 Farm Bill”) removed hemp from the definition of marijuana under the Controlled Substances Act, many financial institutions and their affiliates have refrained from offering banking services to hemp businesses. In practice, the passage of the SAFE Banking Act should alleviate apprehension regarding hemp on the side of financial institutions.

With a majority of state now allowing for some form of cannabis (33 medical, 11 adult-use recreational, and 47 with hemp laws) the time for Congress to act has come. Although many are expecting SAFE Banking Act to pass in the House, the passage in a Republican-controlled Senate is more uncertain. If you support the cannabis industry, or if you understand the importance of increasing public safety by providing cannabis-related businesses access to financial services, we would strongly encourage that you urge your members of Congress to support the SAFE Banking Act.

For any questions on the SAFE Banking Act, or how you can reach out to your local Congress representatives, please reach out to a Greenspoon Marder Attorney.

*Allen Paxton is not an attorney

About Greenspoon Marder

Greenspoon Marder is a national full-service business law firm with over 200 attorneys and offices across the United States. We are ranked among American Lawyer’s Am Law 200, as one of the top law firms in the U.S. since 2015. Our firm was founded with the goal of providing the highest quality legal services at the highest value for our clients. Each of our clients is unique and so are their legal needs. We believe no one size fits all for professional services. Our lawyers offer flexible and creative solutions to meet our clients’ respective needs. Our mission is to understand the challenges our clients face, build collaborative relationships and craft solutions with a focus on strategic goals.

MEDIA CONTACT
Natalie Villanueva, Director of Marketing
954.333.4308 | natalie.villanueva@gmlaw.com

This Greenspoon Marder LLP Client Alert is issued for informational purposes only and is not intended to be construed or used as general legal advice nor a solicitation of any type. Please contact the author(s) or your Greenspoon Marder LLP contact if you have any questions regarding the currency of this information. The hiring of a lawyer is an important decision. Before you decide, ask for written information about the lawyer’s legal qualifications and experience.

Next Previous

Subscribe for
News & Events

Search By Author

Search By Practice Area

Search By State

News

House of Representatives Set to Vote on SAFE Banking Act Today

Share

Subscribe for News & Events

News & Events

News & Events

Subscribe for
News & Events