Community Banks Back Cannabis Financial Services Bill

The Independent Community Bankers of America sent a letter to the leadership of the House and the Senate urging them to pass the SAFE banking bill.

The bill would allow for cannabis companies to use banks and banking services. The letter noted that “The SAFE Banking Act would create an effective, safe harbor from federal sanctions for banks that choose to serve CRBs (cannabis-related businesses) in states and jurisdictions where these businesses are legal.”

The safe harbor would extend to banks that serve the many ancillary businesses that serve CRBs. This list includes landlords, accountants, utility providers, and others that may be paid in funds ultimately derived from cannabis sales.

The letter noticed that regulators may struggle to identify some of these ancillary businesses in places that have deregulated cannabis. The current situation has created legal and regulatory challenges for financial institutions that aren’t even engaged in serving CRBs directly.

The Independent Community Bankers of America on Pubic Safety

The letter also expressed concerns that cash-only businesses – like the current cannabis industry – can often lead to threats to public safety. As of September 2019, 11 states have legalized recreational cannabis. Another 33 others have medical marijuana laws. This quickly creates a series of challenges across the United States. It will likely fuel additional regulatory headaches in the future.

Meanwhile, according to a survey conducted by The Pew Research Center, 62% of all Americans favor legalizing cannabis. According to the survey “Majorities of Millennials (74%), Gen Xers (63%) and Baby Boomers (54%) say marijuana USE should be legal. Members of the Silent Generation continue to be the least supportive of legalization AT 39%). However, they have increased support in recent years.

Finally, with that level of public support, legalization will continue to spread. A lack of banking access will further remain a major problem for the industry without the passage of the SAFE Banking Act.