Marijuana SAFE Banking Act 2019

The SAFE Banking Act And The Future Of Cannabis Business

Zencanna
December 19, 2019 0 Comment

The SAFE Banking Act and the future of cannabis business – The only reason why marijuana businesses are not able to access basic financial and banking services is because of the lack of federal permissions to the financial institutions.

Yes, since marijuana is a schedule 1 drug/controlled substance, making it prone to abuse, it is considered illegal at the federal level. Due to this, the federal government doesn’t permit the banks and the financial institutions to extend or do any kind of business with the cannabis industry.

In fact, the heavy penalty charges imposed on financial institutions and banks for extending the banking services, is what is making the financial institutions apprehensive. It’s sad but due to the lack of SAFE Banking Act in place, financial institutions are failing to take advantage of the burgeoning marijuana industry.

The SAFE Banking Act

SAFE Banking Act For Marijuana Business
SAFE Banking Act For Marijuana Business – Washington DC

The “Secure and Fair Enforcement” (SAFE) Banking Act was originally introduced in May, 2017, with the agenda of offering protection to the financial institutions, who did business with cannabis companies, especially in states where marijuana was legalized. Although now, certain banks can work with marijuana companies in the 33 legalized states (for medical marijuana) and 10 states and Washington DC (for recreational ones), yet they have to apply for temporary riders to do so.

With the passing of the SAFE Banking Act, the need for such riders would get eliminated and the banks would be able to deal with the cannabis companies, without any fear of penalty of any kind. The bill would prevent the federal government to interfere or penalize the financial institutions from working with marijuana business setups.

The Act has been recently passed in the House of Representatives by a vote of 321 to 103, but whether it gets passed at the Senate, is something we will have to watch out for. The passage and passing of bill will be a great jump-start towards the bright future of marijuana business in U.S.

Legal Status and Attitude Towards Marijuana

Although, cannabis has been very categorically kept under schedule 1 drug by the federal government, yet its acceptance at the state level, tells a very different story. 

More and more people have shed inhibitions around the usage of the drug and understood the importance of its medical properties.

CBD or Cannabidiol, a major component in Medical marijuana, is a much sought-after ingredient, meant to treat a list of severe physical and mental issues. From chronic pain, cancer treatments to seizures, the drug is now a potent medicine for a host of diseases and disorders, including a few mental disorders to the tune of depression and anxiety.

CBD Oil
CBD Oil

The medical properties of CBD in marijuana products has now been recognized and hence, backed with a lot of support. No wonder, CBD derived from hemp, is expected to grow from a $390 million dollar market to $1.3 billion market, by 2022 tentatively.

This change in attitude, especially towards marijuana and its derivatives, has helped build pressure on states. As a result, we now have 33 states who have legalized medical marijuana and 10 states and Washington DC, with a legal status for adult-use marijuana. This growing legal status of marijuana showcases the evolution of the attitude towards the drug and its acceptance.

Going by statistics, the percentage of people in the age bracket of 50-65, have doubled their usage of marijuana and those, over and above 65, have increased their intake by at least seven times. According to Pew Research Survey, 62% of Americans believe that marijuana should be legalized. Even the analysts feel that the U.S. Marijuana industry will generate $17.5 billion in tax revenue alone, by 2030. 

Marijuana businesses understand the potential that the cannabis industry holds and hence, they have been raising funds, to get started with it. In fact, Marijuana companies raised $13.8 billion in funding in 2018 alone, which was four times more than what was raised in 2017. This trend will increase with time and if, the SAFE Banking Act, gets the green signal then the marijuana companies will be able to bridge the gap between the federal and state law.

Several presidential candidates have also voiced their acceptance towards the drug, and demanded political support, with the legalization of cannabis.

  • Senator Kamala Harris, one of the sponsors of the bill, Marijuana Justice Act, supported expunging convictions for those who were caught with marijuana, calling for decriminalization and legalization of the drug.
  • Former Vice President Joe Biden too wants the drug to be decriminalized and wants the criminal records of all the convicts (found with the possession of marijuana previously) expunged.
  • Pete Buttigieg, South Bend mayor, wants all drugs decriminalized, commanding a reduction in sentences for drug offences.

Benefits of SAFE Banking Act to the Marijuana Business Players

The passing of the law, would allow more marijuana retailers to consider more safer and better card transactions options, helping the cannabis industry stay more regulated. Since each state requires strict seed-to-sale tracking, along with compliance fulfillment from retailers and dispensaries, the law would assist all marijuana businesses to stay under the regulatory and surveillance radar.

Cannabis Legalization
Cannabis Legalization

All kinds of business set ups of cannabis companies, ranging from marijuana growers, cultivators, distributors, retailers and dispensaries would benefit from the SAFE Banking Act as all the lawful companies would get a chance to work confidently and safely with the financial institutions, at both the state and federal level. 

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