Senate Leaders Spark Up Marijuana Banking Reform
Take heart, all you political cynics. You can still find common ground in Congress. Ironically, it’s over marijuana.
While Republicans in the U.S. House squabble like unruly toddlers over the federal budget, the U.S. Senate is moving forward in bipartisan fashion on cannabis banking reform.
Senate Majority Leader Chuck Schumer (D-NY) on Wednesday reaffirmed his long-standing goal of getting cannabis banking legislation passed in Congress. Schumer also said he is pushing amendments that focus on criminal expungements and gun rights for medical marijuana patients.
Schumer on September 20 filed the Secure and Fair Enforcement Regulation (SAFER) Banking Act, an expanded version of the SAFE Act that has been languishing in Congress.
The chair of the Senate Banking Committee, Sherrod Brown (D-OH), responded to Schumer’s move by saying that he expects a “strong majority” of his panel to vote in favor of SAFER at a legislative markup scheduled for next week. Most of Brown’s GOP counterparts on the committee have expressed support for SAFER.
The following post on the social media site X (formerly Twitter) tells the story:
Schumer told the press on Wednesday: “This ‘war on drugs’ has turned into a war on people and communities, specifically people and communities of color, and a war on business. [SAFER] allows cannabis businesses that have traditionally operated in cash to finally have the opportunity to accept credit and debit cards, allowing them to grow their businesses, pay their employees, protect their customers and ensure public safety.”
Schumer said he’s “committed to including” the Harnessing Opportunities by Pursuing Expungement (HOPE) Act and Gun Rights and Marijuana (GRAM) Act in the final legislation.
The HOPE Act entails federal incentives for states and local governments to expunge cannabis criminal records in their respective jurisdictions. The GRAM Act would permit medical marijuana patients to purchase and possess firearms that they’re currently banned from under federal statute.
“I’ve long advocated for expungement of records for cannabis offenses, and with SAFER Banking moving through the committee in such a strong, bipartisan way, I believe now is the time to get it done,” Schumer said. “I look forward to seeing the bill pass out of committee, so we can vote on it on the Senate floor.”
Like its previous incarnation called SAFE, the SAFER Banking Act would help solve the marijuana industry’s cash woes, by allowing canna-businesses freer access to financial services. Without access to banking, marijuana businesses lack the ability to get loans, process credit card payments, deposit cash, write checks to suppliers, and other functions they need to perform to remain viable businesses.
The SAFER Banking Act would prevent federal banking regulators from:
- Prohibiting, penalizing or discouraging a bank from providing financial services to a legitimate state-sanctioned and regulated cannabis business, or an associated business (such as a lawyer or landlord providing services to a legal cannabis business);
- Terminating or limiting a bank’s federal deposit insurance primarily because the bank is providing services to a state-sanctioned cannabis business or associated business;
- Recommending or incentivizing a bank to halt or downgrade providing any kind of banking services to these businesses; or
- Taking any action on a loan to an owner or operator of a cannabis-related business.
This legislation also would create a safe harbor from criminal prosecution and liability and asset forfeiture for banks and their officers and employees who provide financial services to legitimate, state-sanctioned cannabis businesses, while maintaining banks’ right to choose not to offer those services. The bill also provides protections for hemp and hemp-derived cannabidiol (CBD) related businesses.
SAFER would undercut the growing black market in marijuana sales and improve the industry’s financial transparency in legal cannabis states. SAFE and SAFER are closely aligned. SAFE has passed the House several times, but has remained bottled up in the Senate.
Schumer aims to finally push banking reform through Congress. If he succeeds, the marijuana industry would get the next “profit catalyst” it has been waiting for.
Legal reform equals new profits, and higher share prices, for marijuana companies. Indeed, we’re facing a “break out” year in 2024 for marijuana and the ancillary industry of psychedelics. The time to position your portfolio is now.
However, before devoting your money to a pot stock, you need to conduct due diligence.
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John Persinos is the chief investment strategist of Marijuana Profit Alert.