Bipartisan legislation to reform federal banking laws and allow legal marijuana businesses easier access to financial services has been reintroduced in Congress, boosting cannabis stocks in Thursday trading and giving the industry hope for more bullish times ahead.
The latest effort to pass the Secure and Fair Enforcement Banking Act, aka the SAFE Banking Act, is led in the Senate by Jeff Merkley, an Oregon Democrat, and Steve Daines, a Montana Republican.
Reps. Earl Blumenauer, an Oregon Democrat, Dave Joyce, an Ohio Republican, are the leading sponsors of the House of Representatives version.
“We are committed to making 2023 the year a bill is signed into law that ensures all legal cannabis businesses have access to the financial services they need,” Merkley and Daines said in a statement.
I introduced the SAFE Banking Act to help make sure all legal cannabis businesses have access to the financial services they need to help keep their employees and their communities safe. We need to finally pass it in 2023, and we have a path to do it. https://t.co/Aa2iqJz5Y2
— Senator Jeff Merkley (@SenJeffMerkley) April 26, 2023
Markets reacted warmly to the news during Thursday morning trading.
The price of shares in major multistate operators such as Curaleaf Holdings (CURA on the Canadian Securities Exchange; CURLF on over-the-counter markets), Green Thumb Industries (GTII on the CSE; GTBIF on the OTC) and Trulieve Cannabis Corp. (TRUL on the CSE; TCNNF on the OTC) jumped by as much as 12%.
“It is long overdue for cannabis businesses to have protections as a regulated market, creating a safer space for all,” Curaleaf said in a tweet.
If passed, SAFE Banking would bar federal banking regulators from punishing financial institutions that offer services to legal marijuana businesses.
The measure would not solve the tax problems stemming from Section 280E of the Internal Revenue Code, but it would be a welcome win for cash-strapped cannabis businesses eager for some measure of federal relief.
Earlier efforts have cleared the House of Representatives seven times, only to stall out in the Senate.
Advocates for both large and small marijuana companies say SAFE Banking would ease bureaucratic headaches and safety concerns for cannabis operations forced to do business in cash as well as help small businesses access capital through more traditional lending avenues now blocked.
“With a supermajority of Congress now representing a state with licensed cannabis sales, enacting this sensible and necessary legislation should be among the least controversial issues before the Senate today,” said Aaron Smith, CEO and co-founder of the Washington DC-based National Cannabis Industry Association.
SAFE Banking’s unsuccessful history
Despite endorsement from Democratic Sen. Majority Leader Chuck Schumer, SAFE Banking was never brought to the floor for an up-down vote in the previous Democratic-controlled Congress.
And Republican leadership, led by Minority Leader Mitch McConnell, thwarted attempts to attach the bill to larger defense and budget bills.
According to a recent Senate Banking Committee report, the 2021 version of SAFE Banking was referred to that committee last week.
That committee is chaired by Sen. Sherrod Brown, an Ohio Democrat.
Brown last month said he plans to hear SAFE Banking in his committee, where planned amendments that would include expungements and gun rights can be added.
No hearing date is yet set, Brown told an NBC News reporter on Thursday morning.
SAFE Banking has yet to be heard in the Senate.
“Stand alone #SAFEbanking bill filed in the senate. Now… will leadership give us a vote?” Trulieve CEO Kim Rivers asked in a tweet.\
The so-called “SAFE Plus” that failed in the Senate late last year would have included the HOPE Act, which was intended to give grants to states to aid expunging low-level marijuana offenses from criminal records, and the GRAM Act, which would allow law-abiding cannabis users to buy and own firearms.
What needs to happen
Sixty votes are needed to advance legislation in the Senate under antiquated cloture rules.
The Democrats now hold a slim majority in the Senate, 51 seats to 49.
Nine Republicans have co-sponsored past SAFE Banking efforts. Including Daines, this version has five Republican co-sponsors.
If all nine eventually endorse this version and every Democrat also supports the bill, the measure could reach President Joe Biden’s desk.
While the president hasn’t indicated support one way or the other, Biden signed a cannabis research reform bill into law last year and also triggered a review of marijuana’s Schedule 1 classification under federal law.
“The SAFE Banking Act must be a public safety priority for this Congress,” Sen. Ron Wyden, an Oregon Democrat and bill co-sponsor, said in a statement.
“We are closer than ever to meaningful reform. Now let’s get it done.”
Chris Roberts can be reached at firstname.lastname@example.org.