The U.S. Senate Committee has made a significant stride in the cannabis industry by passing the Secure and Fair Enforcement Regulation (SAFER) Banking Act. This legislation, initially introduced as the SAFE Banking Act, aims to prevent federal banking regulators from penalizing banks that work with legal cannabis businesses.
The Current State of Cannabis Banking in the U.S.
Despite the banking ban, transparency among financial services firms that work with legal cannabis businesses prevails within the industry. Data provided by the U.S. Treasury Department reveals that over 800 banks and credit unions have filed paperwork with the U.S. government acknowledging their relationships with licensed cannabis businesses. This figure marks a significant increase from a year ago when the agency identified 553 banks and 202 credit unions providing banking services to marijuana-related businesses.
The banking ban poses one of the industry’s most formidable challenges. Even if cannabis businesses operate in legal states, financial institutions will not work with them due to federal illegality. As a result, many businesses are forced to become cash-only operations, rendering them vulnerable to theft and other criminal acts.
The Impact of the SAFER Banking Act on Cannabis Businesses
The passage of the SAFER Banking Act could potentially alleviate these issues. With two-thirds of the country allowing legal cannabis markets and more than a third permitting recreational use, banking, government, and industry representatives have been clamoring for years to remedy this catch-22 situation.
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The SAFE Banking Act was introduced in Congress several years ago but hit a stalemate in the Senate after being approved by the House of Representatives with wide margins and significant bipartisan support. Last April, it was reintroduced in Congress, and now, members of the Senate Banking Committee are scheduled to hold a “mark-up” on a newly introduced version of this renamed legislation.
Looking Ahead: The Future of Cannabis Industry with SAFER Banking Act
The advancement of the SAFER Banking Act marks a pivotal moment in the cannabis industry’s journey towards financial transparency and security. As we await further developments, it’s clear that this legislation could potentially transform the landscape for legal cannabis businesses across the nation.
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Source: Forbes
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