SAFE Banking Act Pulled From Defense Bill, Dead In 2021December 14, 2021
After being passed by the House of Representatives as part of the annual $768 billion defense spending bill last week, the SAFE Banking Act was removed from the Senate’s version of the legislation, ending its chances of becoming law this year. The act’s passage has been a priority for the cannabis industry for multiple years now, as its provisions to open access to financial services would be transformative for growers and retailers alike.
It’s unclear precisely why the Secure and Fair Enforcement Act was dropped from the final version of the Senate’s defense bill, aside from the chamber’s established reluctance to take up the issue—the House has passed the SAFE Act as standalone legislation numerous times but it has never made progress through the Senate. Its chances were not helped by diffidence from Majority Leader Chuck Schumer, who along with Senators Ron Wyden and Cory Booker, would prefer to liberalize financial prohibitions on the cannabis sector through provisions in their Cannabis Administration and Opportunity Act, which they unveiled in July.
The SAFE Banking Act is best known as the bill that would allow cannabis companies access to the digital banking services most businesses take for granted, but it has other effects that would be just as meaningful. That’s in part because while the prohibition on banking is true of large, national banks, at this point most cannabis businesses are able to find banking services among regional financial institutions. But, by bringing those larger banks back into the fold, the SAFE Act would also open the cannabis industry to outside investment in a way that has been blocked up to this point. That change alone could have immense consequences for the industry, spurring growth across the board in a business that has been starved for capital even as it generates billions of dollars.
The SAFE Act’s defeat is a reminder of the steep climb cannabis legalization of any kind faces in the U.S., despite its strong support among voters.—Danny SullivanSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning. You will also receive the Cannabis edition as part of your subscription.