In a major political development representing the first time a body of Congress has approved pro-cannabis legislation, the House of Representatives passed the SAFE Banking Act (H.R. 1595), sponsored by Colorado Representative Ed Perlmutter (D) and introduced originally in March.
The bill would allow financial institutions to bank state-legal cannabis companies and appealed to legislators on a bipartisan basis. The debate centered around the need for safety along with concern by some that passage might signal de facto legalization. Both anti-cannabis and pro-cannabis groups have expressed negative views on the legislation, with pro-cannabis advocates suggesting that the legislation doesn’t go nearly far enough. The debate left clear that there is much more work that needs to be done in Congress, with the SAFE Banking Act serving as only a first step.
The final vote, which required a vote in favor by 2/3 of the House, was 321-103 (10 abstentions). Democrats overwhelmingly supported the legislation (229-1, with 5 abstentions), while Republicans were mixed (91-102, with 5 abstentions). The next step is for the Senate to consider its version of the SAFE Banking Act later this year. Should it pass, the two bills would need to be reconciled. Upon both bodies of Congress passing the SAFE Banking Act, it would be submitted for Presidential approval.
For the industry, this represents a major inflection point and hopefully bodes well for further rationalization of federal cannabis policies, including research, taxation, access for veterans and other issues that would still fall short of legalization.
Written by Alan Brochstein, CFA
New Cannabis Ventures