In the Fall of 2021, the U.S. House of Representatives once again passed the Safe and Fair Enforcement (SAFE) Banking Act, with joint support from both parties. And although the Senate has yet to sign off, last month, the bill had 40 co-sponsors therein.
The SAFE Banking Act is intended to protect banks and financial institutions that serve cannabis-related businesses, but it does not take the ultimate step of national legalization. Currently, banks serving cannabis-related businesses face federal penalties, even when those businesses operate in states that have legalized marijuana. The SAFE Banking Act would prohibit such penalties, enabling cannabis-related businesses to move away from cash-based models thereby physically safeguarding the businesses and their profits, and allowing them to expand.
However, the current legal landscape is disjointed. Proponents posit that the SAFE Banking Act will allow cannabis-related businesses to access necessary financial services, but critics maintain that the bill does not go far enough. For example, despite broad bipartisan support, progressive federal lawmakers assert that protecting banks is just one piece, and that the Congress should focus on more comprehensive cannabis reform, which must include legalization.
Some in the Massachusetts cannabis community also criticize the bill for not doing more to address racial inequities in the cannabis field, including remedying the impacts of the War on Drugs. Social equity is a key priority for them, so much so that social equity programs were included in the 2016 Massachusetts legalization laws. Nevertheless, some in the Massachusetts cannabis community are looking through the smoke and do not actively oppose the bill, but rather view it as better than nothing. Luckily, several local banks are already working with Massachusetts dispensaries despite the potential federal implications.
It is unclear whether the fifth time’s a charm such that the Senate will pass the SAFE Banking Act this time as part of the National Defense Authorization Act. In the meantime, however, Massachusetts dispensaries are fortunate to be able to rely on their local banking allies.
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