Banks are federal entities that receive protection from the federal government. If your bank is FDIC protected, that means that the bank is insured and safe. That is also posed a problem for many marijuana businesses across the country. As many states are now legalizing marijuana, and many states that allow legal medical marijuana, the businesses that sold the marijuana legally were still not able to use a bank to save and secure their funds.
That’s because marijuana is still considered a federally banned substance. On Wednesday, the house officially passed a bill called the SAFE (or Secure and Fair Enforcement Act) that would give banks permission in the legal ability to finally offer financial services to legal cannabis companies. In short, these marijuana businesses could effectively start using a banking system to secure their funds.
This is a massive victory for the industry as a whole. The vote took place in the US House of Representatives and it was an overwhelming victory of 321 to 103. It was mostly Democrats who voted this through, led by Colorado Representative Ed Perlmutter. His state has legal marijuana for recreational use, so it was important for him to provide this growing industry the means using a federally backed bank.
The difficult part now is going to be how the Senate handles this bill. Still, even if it’s denied by the Senate, marijuana advocates still say this is a major win. To at least get one part of the government to embrace the industry really goes to show how far we’ve really come on this issue. Even as more states become legal, marijuana is still prohibited federally.
A Big Day for Marijuana Advocates
These types of battles are often won one day at a time. It’s little incremental pieces of the puzzle that get solved and put together, eventually leading to the thing become completed. Marijuana advocates have been fighting for decades to both legalize the plant, reduce restrictions, and even prevent people from going to jail simply for consuming marijuana.
While there’s been a lot of victory in individual states, to finally have some movement within the federal government is a huge jump. Kevin Murphy is CEO of Acreage Holdings, one of the largest marijuana companies in the country. He says that the SAFE Banking Act was “big day in history going forward with cannabis.”
“It’s a big deal because it’s the first meaningful step in recognizing the fastest growing industry in the United States,” he said. “It’s a legitimate business, it employs tens of thousands, and think about the hypocrisy we’ve lived with in this space — the IRS is willing to collect your taxes… but they’re not really willing to have banks bank the industry.”
