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What is the SAFE Banking Act/Cannabis Banking Bill?
It’s no secret that the cannabis industry is one of the fastest-growing economies in America. According to BofA Securities, cannabis sales in the U.S. increased 40% in 2021 to $25 billion— a figure that easily surpassed the $18 Billion mark reached by cannabis sales.
There is a bill before Congress, H.R. 1595, known as the SAFE Banking Act, which would end all federal cannabis prohibition laws, allowing banks to legally serve the cannabis industry without risking their personal liability.
Latest news on the cannabis banking bill
The SAFE Banking Act is a bill that would allow banks and credit unions to provide basic financial services to cannabis businesses in states that have legalized cannabis. It’s currently pending in the Senate, where it has been repeatedly introduced over the past few years with no success.
The bill was reintroduced in 2019 and is currently being considered by the Senate Committee on Banking, Housing, and Urban Affairs. Senator Jeff Merkley (D-OR) introduced the SAFE Banking Act in 2019. The bill would amend the federal Controlled Substances Act, so that banks could provide basic financial services without fear of prosecution under federal law.
Currently, banks are prohibited from doing business with cannabis companies because cannabis remains illegal under federal law even though several states have legalized it for medical or recreational use. If passed into law, the SAFE Banking Act would mean access to banking services for cannabis businesses across the country. This includes access to basic business services, like payroll processing or accepting credit card payments at dispensaries.
The SAFE Banking Act has been introduced in the Senate, but it’s still in committee and will likely take some time to make its way into law. The bill has been referred to the Committee on Banking, Housing, and Urban Affairs—which means it will be at least a few months before we see any action on this particular piece of legislation.
How will the SAFE Banking Act affect the cannabis industry?
The SAFE Banking Act is a bill that was introduced under the 115th Congress, with the goal of repealing Section 280E of the Internal Revenue Code (IRC). The bill would allow cannabis businesses operating in legal states to fully deduct business expenses on their taxes, just like any other business. The SAFE Banking Act would also ensure that banks and credit unions do not face federal sanctions when they provide services to cannabis businesses or individuals involved in transactions related to cannabis.
If passed, the SAFE Banking Act would allow cannabis businesses to access financial services. This includes opening bank accounts, accepting credit cards and checks, paying taxes, and paying bills. The bill would also require banks to report suspicious activity in the cannabis industry, as they do with any other business.
The SAFE Banking Act would create a safe harbor for depository institutions that provide such services to cannabis businesses. This would allow banks to offer basic banking services like checking accounts and wire transfers without fear of losing their charter or license for providing these services. The SAFE Banking Act would also ensure that financial institutions are not excluded from any federal program or benefit because they provide services to legitimate marijuana businesses.
There is no guarantee this bill will pass, but it gives entrepreneurs in the cannabis industry hope to operate like any other legitimate business. The cannabis industry is growing rapidly, and reached $25 billion in revenue in 2021. This growth is due in large part to legalization efforts in states across the nation. But without access to banking services, many cannabis entrepreneurs face high costs of doing business, including transporting cash and paying for security measures.
Currently, there are more than 800 licensed marijuana businesses operating in California alone, but most banks will not take their business because they fear being prosecuted by federal regulators under the Controlled Substances Act (CSA). This means many dispensaries have no choice but to operate on cash only — putting them at risk of robbery and other crimes.
In addition, cannabis businesses cannot use the services of payroll companies or any other service that requires access to a checking account or credit card.
Considering a career in cannabis banking?
A cannabis banker is someone who works with legal marijuana companies and makes sure they are able to bank safely and securely.
As part of the job description you will be responsible for ensuring that your company’s money is secure, safe, and insured against loss or theft. This means that you will be working with financial institutions (banks) to protect your company’s interests while also helping them avoid any potential legal liability associated with handling their accounts. As such, it is very important that you have excellent communication skills as well as prior experience working with clients of all types within an environment where confidentiality is paramount.
Depending on who you work for this might mean that you need to go through additional training or certifications in order to achieve compliance with state laws governing cannabis banking.
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