The passage of the Secure and Fair Enforcement Banking Act of 2019, known more commonly as the SAFE Banking Act of 2019, in the House of Representatives is a historic moment for the cannabis industry. The bipartisan vote, which passed by a margin of 321 to 103, was the first-ever vote on a standalone marijuana reform bill.
The SAFE Banking Act’s stated purpose is to “create protections for depository institutions that provide financial services to cannabis-related legitimate businesses and service providers for such businesses, and other purposes.”i The bill aims to remove barriers to marketplace entry for cannabis related legitimate businesses. To accomplish this goal, the bill establishes essential safe harbor protections to financial institutions that provide financial services to cannabis-related legitimate businesses. Thus, the SAFE Banking Act intends to reverse the difficulties of the multi-billion dollar industry of cannabis-related legitimate businesses who have been “locked out of the banking system,” and as a result have not been able to conduct many financial activities that are integral to running a business.ii
Undeterred by the federal ban of cannabis, Representatives across party lines spoke highly of the passage of the bill in the House. Including the bill’s lead House sponsor, Rep. Ed Perlmutter (D-Colo.), who stated “American voters have spoken and continue to speak, and the fact is you can’t put the genie back in the bottle… Prohibition is over. Our bill is focused solely on taking cash off the streets and making our community safer.”iii
The bill’s passage caused celebratory reverberations throughout the cannabis industry as many deemed it a “major victory.” iv However, doubts quickly arose about the bill’s future success. After an initial rise in cannabis stocks after the vote on Wednesday, stocks fell on Thursday amidst reports that the future of the bill is uncertain. The bill goes to the Senate next, where predictions of its chance of enactment range from 4 to 33 percent, and some speculate that a vote may not occur this year at all.v
The doubts concerning Senate vote result from the partisan politics involved with passing a cannabis focused bill. Namely, Senate Majority Leader Mitch McConnell’s (R-Ky.) position will be largely determinative of the bill’s fate. While McConnell staunchly opposes marijuana, there is speculation that McConnell may vote favorably to help Republicans in the 2020 elections.vi However, McConnell is not the only hurdle for the SAFE Banking Act of 2019; the bill faced opposition from various progressive groups as well.vii These groups chastise the bill for addressing only banking issues, rather than long-standing community issues have resulted from the prohibition of marijuana.
However, many remain positive about the passage of the SAFE Banking Act of 2019. Representative Dina Titus (D-NV.) took to twitter to celebrate the House vote and express her hope for a similar result in the Senate vote, stating “Nevada is proof that the era of marijuana prohibition is over. It’s time for @realDonaldTrump and the U.S. Senate to start acting like it.”viii Additionally, the bill’s passage received praise from Chairwoman of the House Financial Services Committee, Rep. Maxine Waters (D-Calif.), who called the bill “but one important piece of what should be a comprehensive series of cannabis reform bills.”ix
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v https://www.govtrack.us/congress/bills/116/hr1595; https://www.marketwatch.com/story/house-expected-to-pass-cannabis-banking-bill-but-getting-senates-ok-still-looks-tricky-2019-09-24.
vii https://www.marketwatch.com/story/house-expected-to-pass-cannabis-banking-bill-but-getting-senates-ok-still-looks-tricky-2019-09-24 (groups including but not limited to the Center for American progress and the American Civil Liberties Union).