The US House Financial Services Committee has approved the updated version of SAFE Banking Act 2019 which it is not yet a law but a benchmark for the cannabis regulations providing the protection and guidances for banks and payment providers who are willing to work with legal cannabis businesses. S.A.F.E. is the abbreviation which stands for Secure and Fair Enforcement for the Banking Act 2019, better known as SAFE Banking Act or cannabis banking bill, the document first time presented to senate in 2017, has been approved few days ago. The approved updated version – among other things – includes the ‘safe harbour’ doctrine for the banks and other financial institutions if such are having business relations with legal marijuana businesses.
“This calls for a victory dance indeed […] This is a big day for the businesses, employees and communities who have been forced to operate in cash-only for many years.”
– Rep. Ed Perlmutter on Twitter
The legal marijuana market is estimated to reach $23 billion by 2020, and up to $70+ billion by 2030 (see charts) already recording, for example, in 2017 about $4.7 billion in collected taxes from cannabis businesses – and that was paid in cash (source).
Speakers in favor of the Act — the banking executives took pains to point out they were expressing no views on the legalization of pot, only the concept of providing “safe harbor” to FIs (financial institutions) that work with cannabis businesses — discussed the danger of forcing those operations to run via cash.
– see more at: Pymnts.com
Except preventing the obvious ‘cash problems’ coming along with the market growth, this cannabis SAFE Banking Act also prevents federal regulators from targeting banks that accept deposits from legal cannabis operators (legal = approved on a state level).
And it also covers other service providers such as: all kinds of agencies, attorneys, accountants, real estate owners and many other companies that may have a certain relation to cannabis industry, or have relations to a company from the cannabis industry, but not directly with the cannabis plant.
Related links below – to find the details in the original paper(s):
SAFE Banking Act 2019 – at financialservices.house.gov