By: Rachel Gillette and Nabil Rodriguez, Esq.
Photo courtesy NORML.org
SAFE Banking Act passed the House receiving bipartisan support with a vote of 321 to 103!
“Rachel Gillette, partner and chair of Greenspoon Marder’s Cannabis Law Group, told
that this vote is in many ways a bellwether moment for the industry. Political tides are turning; while this U.S. House vote doesn’t mean that anything’s being signed into law or that any sweeping reform is suddenly cast across the country, the news is a symbol of broader trends in federal priorities. Cannabis Business Times
First and foremost, it’s a tentpole for private business development, a major policy platform that spans the aisle in Congress.
‘I don’t know that people understand the difficulty in this day and age of trying to operate a multi-million-dollar business in cash only,” Gillette said. “It is a very challenging situation. If you want to go pay a bill in cash—like a utility bill for your grow facility—a lot of utility companies don’t take cash payments, so you literally have to run around or pay an employee to run around to go get you money orders to be able to pay your bills. You have to make appointments with the taxing authorities to be able to pay your taxes in cash. It makes it very difficult to be tax compliant if you don’t have a bank account. The list goes on and on. If banking was to be expanded—and this would offer protections to financial institutions that choose to offer services to state-legal marijuana businesses—it would be a big step for the industry.’”
So Now What?
Now that the SAFE Banking Act has passed the House, it moves on to the Senate. For a vote to occur in the Senate, the SAFE Banking Act must first pass the Senate Committee on Banking, Housing, and Urban Affairs. The Chair of that Committee, Senator Mike Crapo (R-ID) has previously stated that he plans for the Committee to hold a vote on a cannabis banking bill by the end of this year.
While Senator Crapo has not rejected the possibility of passing the SAFE Baking Act as drafted, it is more likely that the Committee will make changes to the bill or pass an entirely different cannabis banking bill. That said, the House bill does contain some provisions that should appeal to Senate Republicans; most notably, the SAFE Banking Act provides protections for hemp business, which are very important to Senate Majority Leader Mitch McConnell and his home state of Kentucky, and prohibits the reintroduction of the controversial Obama-era initiative known as “Operation Choke Point,” which was extremely unpopular with Republicans. In short, the SAFE Banking Act has bipartisan appeal and support, but it still has quite a few hurdles to clear before making it to President Trump’s desk for signature.