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SAFE Banking Act Dropped From China Competition Bill

A federal bill that would allow financial institutions to offer banking services to legal marijuana businesses was dropped by a bill to encourage competition with China. This marks the sixth failure of cannabis banking provisions to be approved by the U.S. Senate, after they were passed in the House of Representatives.

The Secure and Fair Enforcement Banking Act (SAFE), was a bill that would allow banks and financial institutions to provide services for legal marijuana companies. Current regulations restrict the provision of traditional banking services, such as checking accounts, loans, payroll, and checking account. Few financial institutions will agree to provide these services for marijuana-related businesses. Critics point out that cannabis businesses are forced to use cash primarily because of the policy. This leaves them vulnerable to criminals.

In 2013, Democratic Rep. Ed Perlmutter from Colorado introduced the SAFE Banking Act to Congress. The House of Representatives passed the bill six more times, each time as a separate bill or with other legislation. The Senate has yet to approve the bill.

The House recently approved the provisions of the SAFE Banking Act in February. This was part of the America Creating Opportunities for Manufacturing, Pre-Eminence in Technology and Economic Strength Act of 2022, also known as the America COMPETES Act. It is a bill that supports U.S. manufacturing and increases its competitiveness against China. Punchbowl News announced that the COMPETES Act’s latest version, currently under conference committee, has been abrogated. According to the report, the SAFE Act language was dropped because of Republican negotiators.

“In the wake of the Senate’s inaction, people continue to be killed, businesses continue to be robbed, and employees and business owners in the cannabis industry continue to be excluded from the financial system,” Perlmutter, the lead sponsor of the SAFE Banking Act, said in a statement quoted by The Hill.

Industry, activists react

After news that the legislation had not been included in the latest version of the COMPETES Act Morgan Fox, the political director for the National Organization for the Reform of Marijuana Laws (NORML), said that it “is mind-boggling that this is now the sixth time that SAFE Banking has been approved by the House but stalled by the Senate.”

“This narrowly tailored, incremental, and necessary legislation has broad bipartisan support in both chambers, and it is incredibly disappointing that politics continue to get in the way of saving lives and helping struggling small businesses disrupt and ultimately replace the underground cannabis market,” Fox said in a statement from the cannabis policy reform advocacy group. “If there is a legislative version of the Twilight Zone, the SAFE Banking Act seems to be stuck in it at this point.”

Some supporters of the legislation including Michael Sassano, CEO and founder of cannabis products manufacturer Somaí Pharmaceuticals, believe that Congress is missing an opportunity to make people who work in the industry safer.

“Congress continually drops the easy play by going for an all-or-nothing strategy,” Sassano writes in an email to Chronic News. “Avoiding the SAFE banking act only shows that they don’t care about the cannabis industry and the safety of our employees, but rather their pet projects that get embedded in every failed law they try and pass.”

Despite Thursday’s setback, representatives of the regulated weed industry have not given up on the cannabis banking bill, with hopes that lawmakers will add the legislation to an upcoming spending package.

“The support and political will is there to get the SAFE Banking Act across the finish line. We are encouraged by conversations about pairing the bill with other helpful cannabis and criminal justice reforms,” Steven Hawkins, president of the U.S. Cannabis Council, said in a statement. “We look forward to working with our members and allies to help get the job done.”

Fox said that this is the last chance to get meaningful cannabis reform passed in the United States. This comes as Congress and the nation head into 2022’s midterm election cycle.

“There are still some pathways available to get SAFE Banking approved in the current congressional session, but time is running out,” Fox added. “The Senate should not waste this rare chance for bicameral and bipartisan cooperation that would improve safety and opportunities for hundreds of thousands of people and foster economic development in a majority of states.”

Perlmutter in January said he wouldn’t seek reelection. He also pledged to work to pass the cannabis banking bill before Congress departs.

“I will continue to push for #SAFEBanking to be included in COMPETES, other legislative vehicles, or for the Senate to finally take up the standalone version of the bill which has been sitting in the Senate for three and a half years,” Perlmutter tweetedOn Thursday.