House Passes SAFE Banking Act: First Cannabis Bill to Ever Pass a Chamber of Congress

This afternoon the United States House of Representatives voted to pass the SAFE Banking Act. The bill passed by a vote of 321 to 103. The SAFE Banking Act is the first cannabis reform legislation ever to pass a Chamber of Congress.

The bill still needs to make it through the Senate and the President. This is considered a huge win for US cannabis advocates and investors in the space. The biggest challenges from here appear to be Chair of the Senate Banking Committee Mike Crapo, Chair of the Senate Judiciary Committee Lindsey Graham, and Senate Majority Leader Mitch McConnell.

Simply put, the SAFE Banking Act allows cannabis businesses access to financial institutions. Because cannabis remains a Schedule 1 controlled substance, banks and credit unions cannot legally conduct business with cannabis companies.

From conversations with cannabis executives, we have been told that banking is currently possible, just much more expensive than it should be. Banks face possible repercussions such as being charged with ‘money laundering,’ thus charge extra fees for accepting the risk.

As C21 founding partner Todd Harrison has pointed out multiple times, the US cannabis sector needs more capital and any progress is good progress:

#SAFEBankingAct would be a great incremental step for the #cannabis industry. Credit lines, checking accounts, credit cards, in time. Access to capital markets remains the end-goal however; liquidity is oxygen on the frontier.

— Todd Harrison (@todd_harrison) September 23, 2019

If you haven’t been paying attention, it has been a rough year for US cannabis operators:

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Information for this commentary and analysis was found via Sedar and the linked sources in the article. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.