The Safe Banking Act, also known as the Secure and Fair Enforcement Banking Act (SAFE Banking Act), is sorely needed legislation to address the critical issue of financial services being denied to marijuana businesses that operate in the state-legalized industries. We’ve written extensively about the SAFE Banking Act over the past several years. See here, here, here, just to name a few. With another year of Congressional action (or inaction) before us, let’s review the SAFE Banking Act, its implications, and why it matters for marijuana businesses, financial institutions, and consumers.
What is the SAFE Banking Act?
The SAFE Banking Act has been in discussion since 2013. It seeks to provide a legal framework to permit financial institutions to provide banking services to cannabis-related businesses even though marijuana remains federally illegal. Despite the tidal wave of legalization at the state level, financial institutions remain wary of providing banking services to these businesses because of the state/federal conflict of law and these institutions innate risk-avoidant nature.
This has created a situation where cannabis-related businesses struggle to access banking services, leading to predatory arrangements where services are available, an inability to raise capital, and leaving many licensed business to operate entirely in
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