The legal world has been closely monitoring the progression of the Secure and Fair Enforcement Banking Act (SAFE) of 2019 that aims to provide “protections for depository institutions that provide financial services to cannabis-related legitimate businesses and services providers for such businesses, and for other purposes”. In essence, it targets to provide safer and fairer banking options to legitimate businesses in the rising cannabis industry that have been experiencing banking difficulties due to the ambiguous legal status of cannabis at the federal level.
The potential significance of the SAFE Banking Act to the banking industry, as well as the cannabis industry, cannot be overstated. If passed, it would offer some level of protection to banks and financial institutions from being penalized by federal authorities for providing financial services to legal cannabis businesses. This would mark an important stepping stone, not just for the often cash-reliant cannabis businesses, but for the broader banking sector as well.
For further details of the SAFE Banking Act and its potential implications, visit the article by Bricker Graydon LLP at JD Supra.
Opinions about the SAFE Banking Act have been mixed, with proponents arguing that it will help to bring previously uncertain business transactions into the light, creating a safer microeconomic climate in states where cannabis has been legalized. On the flip side, critics suggest that without an accompanying change at the federal level, the SAFE Banking Act could engender an uncertain landscape fraught with legal difficulties in enforcement and interpretation.
The future of the SAFE Banking Act remains unclear, but what is undisputed is the attention it’s been receiving from financial institutions, related businesses, and regulatory bodies across the country. Its progress is bound to have a considerable impact on the evolving relationship between the banking industry and the cannabis sector, affecting businesses, investors, and consumers alike.