By William G. Roark
On Wednesday, September 25, 2019 the United States House of Representatives passed legislation that aims to solve one of the most problematic issues in the regulated marijuana industry: access to financial services. Passed by a large margin, H.R. 1595, also known as the SAFE Banking Act would prevent Federal financial regulators from punishing financial institutions that provide services to compliant and regulated cannabis businesses. Remarkably, in a hyper-partisan environment, the vote was well beyond party lines: 321-103. Almost all Democrats voted for the Act as did 91 Republicans. This was also the first standalone cannabis bill to ever receive a full vote in Congress.
Many operators in this industry have been desperately seeking clarity on banking policies for a multitude of reasons, not the least of which is to reduce safety risks associated with running cash-only businesses. Because marijuana remains illegal at the Federal level, banks and credit unions are cautious of doing business with permitted operators. Those which chose not to provide financial services to cannabis businesses often justifiably point to expensive regulatory consequences and the always present risk of criminal liability. Those financial institutions which are currently operating in this space (and that number is growing) often lament – with equal justification – the time and expense related to regulatory compliance.
The SAFE Banking Act is – hopefully – going to fix some of these problems by shielding financial institutions who work with legal cannabis businesses from those consequences. The Act was supported, not only by the cannabis industry, but also by the American Bankers Association, the Credit Union National Association and the Independent Community Bankers of America.
It’s not all good news, however. As your high school civics teacher taught you, a bill must pass both chambers of Congress before it becomes law. And while a version of this legislation has been introduced in the Senate and currently has 33 cosponsors, it is uncertain if that legislation will ever receive a full vote on the floor of the United States Senate. But for the moment, there is reason for optimism.
If you have any questions about the status of cannabis in Pennsylvania, then please contact the chair of our firm’s Medical Marijuana and Hemp Law Practice Group: William Roark at firstname.lastname@example.org. Bill currently serves as Co-Chair of the state wide Pennsylvania Bar Association’s Medical Marijuana and Hemp Law Committee, has lectured on the regulated cannabis