The SAFE Banking Act is back in Congress
The short version:
After it failed to pass at the end of 2022, the Secure And Fair Enforcement (SAFE) Banking Act was reintroduced by bipartisan lawmakers in both chambers of Congress. If passed, the SAFE Banking Act would help normalize banking and financial services for the legal cannabis industry.
This news of this bill’s return to Congress and its bipartisan backing led to a boost in cannabis stocks and gave more hope to the market moving forward.
Why is the SAFE Banking Act so critical to the cannabis industry?
Under current federal law, banks are discouraged from serving state-licensed cannabis businesses due to the federal prohibition of cannabis. So cannabis companies operate in cash, which makes them vulnerable to crimes like robbery, assaults, tax fraud, and money laundering.
Both large and small cannabis companies say SAFE Banking would make operations easier and safer and open up more access to capital.
Why hasn’t the SAFE Banking Act been passed before?
The House of Representatives has previously approved the SAFE Banking Act seven times – both as a standalone proposal and as part of a package with other legislation. The Senate has not formally considered the bill, but this year’s Senate-backed version of the proposal has 40 co-sponsors, including five Republicans.
Last year’s effort to pass the bill – SAFE Plus – included the HOPE Act, which would have given grants to states to aid in expunging low-level cannabis offenses from criminal records, and the GRAM Act, which would have allowed law-abiding cannabis users to buy and own firearms.
However, this version of the SAFE Banking Act is another standalone proposal. With Congress now having a supermajority of representation from states with licensed cannabis sales, hopes are high for passing it through the Senate. Sixty votes are needed to pass this legislation in the Senate. With Democrats holding a slim majority of 51 seats in the Senate and nine Republicans co-sponsoring the bill, it could get the necessary votes.
The president has not indicated where he stands regarding this proposal. However, Biden last year signed a cannabis research reform bill and also called for a review of marijuana’s status as a Schedule I drug under federal law.
Why are investors now so hopeful?
With yet another reintroduction of this proposal to a Congress of supermajority representation from licensed cannabis states, investors have been again reminded that it is only a matter of time before the federal prohibition on cannabis ends and the market takes off.
Another proposal – the Preparing Regulators Effectively for a Post-Prohibition Adult Use Regulated Environment (PREPARE) Act – has been introduced to Congress with bipartisan support to help develop a regulatory framework for cannabis on the federal level. The PREPARE Act would also help medical professionals get access to cannabis training, develop protections for the hemp industry, and ensure cannabis remains an adult-only product with some medical exceptions. Legislation efforts such as these only reinforce new hopes in the cannabis market.
Why now is a good time to invest in cannabis
As we get closer and closer to federal legalization, now is the time to invest in cannabis. Cannabis companies still have limited access to capital. So businesses with access to noninstitutional money stand the best opportunity to succeed until the SAFE Banking Act eventually passes and institutional money takes over.
Cocannco uses sound financial due diligence to identify and partner with companies and crowdfunding to provide the cash infusion they need to grow.
Ready to learn more about these investment opportunities with Cocannco?