Marijuana businesses pushed the Senate to pass the SAFE Banking Act for easy access to financing
On Thursday, May 11, 2023, the Senate held its first hearing on the Secure and Air Enforcement Banking Act. The lawmakers reinstated the SAFE Banking Act last month in the Senate and Representative House. This legislation, if passed, will allow the cannabis industry to access banking services and financing.
Continue reading this news article for further details on the SAFE Banking Act:
The first hearing, the first step to making banking services accessible
The banking committee of the Senate held its meeting on a bipartisan bill to allow marijuana businesses access to traditional financing and banking services. The cannabis industry sees this bill as crucial for their survival.
The lawmakers heard from both sides in the Examining Cannabis Banking Challenges of Small Businesses and Workers meeting. That includes Steve Daines, R-Mont, and Sens. Jeff Merkley, D-Ore, who reintroduced this bill last week. The committee also heard from Cannabis Regulators of Color Coalition, Commercial Workers International Union, and Drug Police Alliance.
Chuck Schumer (the majority leader) and many others expressed their support for the bill in the hearing. They reiterated that the marijuana industry is facing a decline despite legalization. Legal businesses continue to operate in the shadows without access to banking and financing systems. Many businesses borrow funds from family and friends because they don’t want to go through all the hassle of getting bank loans, only to be denied in the end.
Tim Scott, R-S.C., who is also a committee member, also urged Congress by reminding them of their responsibility to all legal industries, including the cannabis industry. He, however, also added that lawmakers need to eliminate any potential loopholes before making this act a law, as these loopholes can make it difficult for law enforcement to catch weapons and drug traffickers.
The committee welcomes industry leaders and executives
Senate committee also welcomed industry leaders, including the owner of Uncle Budd NYC, Craig Sweat. Uncle Budd pioneered in mobile dispensary truck system in NYC.
Sweat said his products are sitting idle and getting useless because he was held for so long. He also expanded his business by adding a delivery service and entering into a partnership with Omnium Canna for his product manufacturing.
He further highlighted his difficulty in transferring funds because the law prohibits credit unions and banks from providing their services to legal marijuana businesses. Despite the decriminalization of cannabis, it’s still a Schedule I substance meaning financing services can face penalties and federal production.
However, legal businesses can’t acquire loans or even use bank accounts. They are reduced to cash-only models, eventually attracting organized crime, robbery, and money laundering.
Cannabis Regulators of Color Coalition Cat Packer told the committee that small marijuana businesses and employees are forced to deal in the gray market. The terms “black and gray market” has a negative connotation in the context of brown and black business operators.
Packer is black and told the senators they don’t want to equate illegal with black. They should decriminalize small business operators and workers by removing marijuana from Schedule I substances altogether.
SAFE is safer for banks and the cannabis industry
The new bill shields credit unions and banks so they can work with legal cannabis businesses. This new legislation will protect them from prosecution and penalties. The new version of the bill also protects organizations that help underserved communities, such as Minority Depository Institutions and Community Development Financial Institutions. These institutions cater to communities with little to no access to basic banking services.
The American Bankers Association representing all banks in the US thanked the committee for expediting the matter. They encouraged the Senate to reintroduce the bill with key improvements and look forward to working with the bipartisan lawmakers to further improve the bill.
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