WASHINGTON, D.C (420CanNews) — It looks like lawmakers put the SAFE Banking Act on ‘ice’! As the financial world reels from the collapse of Silicon Valley Bank and Signature Bank, the landmark legislation intended to open banking services to the cannabis industry has experienced a setback. The hearings on the weed banking bill, initially scheduled by Senate Banking Chairman Sherrod Brown, have been postponed to prioritize resolving the financial turmoil.
Brown, an Ohio Democrat, emphasized that the SAFE Banking Act was still important, but the bank failures required immediate attention. He added that the delay would only amount to a couple of weeks.
What Is Safe Banking Act?
The act protects banks and depository institutions from penalties by federal regulators for providing banking services to any marijuana related business. The SAFE Banking Act has faced opposition from key figures such as House Financial Services Chairman Patrick McHenry, a North Carolina Republican, who recently dubbed the legislation a “lame half measure.” McHenry suggested that Congress should instead focus on resolving marijuana federal legalization issues.
Unveiling the Challenges
Despite the legalization of marijuana for adult use in 21 states and the District of Columbia and for medical use in 37 states and the District, the federal Controlled Substances Act still prohibits it. As a result, concerns arise among banks regarding possible legal consequences and financial risks associated with the cannabis industry. In addition, these concerns have posed security challenges for cannabis businesses.
In Washington State, 70 robberies were reported at cannabis stores in the first half of 2022, as per Chandra Wax, director of the Washington State Liquor and Cannabis Board Enforcement and Education Division. In California, thefts at licensed cannabis operations more than doubled, reaching 329 incidents in 2022.
Adam Simon, the owner of Seattle’s Reef dispensaries, addressed employee security concerns. Hiring armed guards and providing security training is now essential for their safety. Meanwhile, businesses like California Street Cannabis Co. in San Francisco have high operating costs due to limited banking options. Co-owner Duncan Ley reportedly pays $1,000 monthly to maintain a checking account with a credit union and faces ATM fees in dispensaries due to a lack of credit card acceptance.
What’s the Future of the Safe Banking Act?
Last year, the House, under Democratic control, passed the SAFE Banking Act bill. However, it did not reach a senate deal. Senate Democrats have introduced their comprehensive legalization measure. They tried to include restorative justice provisions, like expunging criminal records, in the SAFE Banking Act but failed due to Republicans’ opposition.
As the future of the SAFE Banking Act remains uncertain and financial turmoil takes center stage, cannabis business owners anxiously await if their banking struggles will finally ease.
— Story Filed By 420CanNews Staff
Here’s More Information on the Topic:
Weed Banking Bill on Hold as Senate Deals With Financial Chaos
Senate Holds First Hearing on Bill to Help Marijuana Businesses Access Financing
Senate Banking Committee Considers Safe Banking in Historic First