Long-awaited banking regulations for cannabis looked unlikely to pass, but the newest coronavirus relief bill may be able to bring it across the finish line.
The Secure and Fair Enforcement (SAFE) Banking Act has been in the works since last year and actually made historic progress by passing the House of Representatives but seemed to have stalled in the Senate. If passed, it would have clarified banking regulations and opened the doors for cannabis business to work with financial institutions. Those provisions may have lost momentum with the SAFE Banking Act, but they are moving forward now as part of the COVID-19 relief bill that is in the works.
Lack of banking access is a legitimate concern during this pandemic, as cannabis businesses have been deemed “essential” in legalized states but have been given almost no resources to continue operating in these difficult times. That is why proponents of the SAFE Banking Act have advocated for the latest COVID-19 relief package to include language from this historic bill. So far, the cannabis industry has been left out of prior relief packages, but advocates are hopeful for this latest bill.
Not all the desired language made it in, however. A bill introduced by Representative Earl Blumenauer, D-OR, had language that would have allowed for the Small Business Administration, a federally run program, to allow cannabis businesses to apply for loans and grants. This bars not only cannabis-related businesses from applying, but also those that do business with them, such as CPAs, landlords and attorneys. There have been many requests to see the SBA help the cannabis industry, as the small operators and farmers are the ones most likely to fail, which will leave only a few big players and a worse market for consumers.
Cannabis advocates have been hopeful that the SAFE Banking Act provisions are incorporated into the next relief bill. Forcing many businesses to operate in a cash-only environment is irresponsible when handling money increases the risk of coming into contact with the coronavirus.
Small businesses don’t have the additional capital and investors that the larger corporations do and puts them at a disadvantage when neither federal programs nor financial institutions will work with them. There are banks that work with cannabis businesses, and there are more banks every month, but it can still be hard to get access to loans and other financial services. By continuing federal prohibition and refusing to recognize the reality of legalized states, more people are at risk of losing their livelihoods and even their lives. Fixing banking regulations in this time of crisis would bring enormous relief to thousands of workers and farmers across the country.
Will the next relief bill keep these SAFE Banking Act provisions and provide much-needed relief to the cannabis industry? Advocates are hopeful but it is still being debated — it has more promise in the House of Representatives but the Senate may choose to axe it. Do you think it will pass? Let us know what you think in the comments down below.