The cannabis industry takes a step into the mainstream, as the House of Representatives voted Wednesday to let federally-insured banks work with dispensaries and related companies in states that have legalized marijuana, marking the first ever federal vote on a stand-alone cannabis bill.
With backing from California representatives and nearly half of House Republicans, the Democrat-controlled chamber approved a law that supporters argue will boost public safety, improve transparency and ease the financing crunch facing the multibillion-dolllar marijuana industry. The House passed the legislation on a 321-103 vote even though cannabis remains illegal under federal law.
The bill, also known as House Resolution 1595, was introduced two years ago by Rep. Ed Perlmutter, D-Colorado, doesn’t require banks to serve the marijuana industry. Instead, it says federal authorities can’t cut off deposit insurance or “take any other adverse action” against a bank just because it serves cannabis businesses and ancillary operations in states or American Indian territories that have legalized the industry.
The potential law, known as the SAFE Banking Act, still must be debated in the Republican-controlled Senate, where it could be amended. And it’s unclear if President Donald Trump would sign any version that reaches his desk.
But Democrats said they added provisions to the bill that they hope will bring some GOP senators around. Backers also hope that growing public support to legalize the recreational and medical uses of cannabis might sway senators up for re-election in 2020.
Opponents of the SAFE Banking Act bill included some civil rights advocates. They argued that congress should pass comprehensive cannabis reform to help people in communities most harmed by enforcement of marijuana laws before passing legislation that helps the commercial market in a limited number of states where cannabis is legal.
But many advocates of marijuana policy reform praised the historic nature of Wednesday’s vote. Justin Strekal, political director for the advocacy group NORML, called it “an important indication that the federal tide is turning and that the era of Congressional inaction is over.”
Banking access continues to be a hurdle for the cannabis industry.
Though 11 states have legalized recreational marijuana, and 33 now allow the use of medicinal marijuana, the federal government still classifies cannabis as a Schedule I narcotic, on par with heroin. That means federally-insured banks and credit card companies won’t do business with state-registered growers, manufacturers and dispensaries out of fear they could be penalized for money laundering.
Some local banks and credit unions have quietly begun working with the industry in states where cannabis is legal. A report this summer from the U.S. Treasury’s Financial Crimes Enforcement Network shows some 633 financial institutions were actively banking marijuana-related businesses at the end of this year’s first quarter — up from just 407 at the start of 2018.