Cannabis is classified as a prohibited substance under the federal Controlled Substances Act. Despite that classification, 36 states and 4 U.S. territories have authorized the use of marijuana for medical purposes. Additionally, 17 states have passed laws allowing the use of marijuana for recreational use. This has left financial institutions and insurance companies stuck in a tough spot between the federal and state laws. Any institution that deals with cannabis could be prosecuted for federal money laundering crimes.
The U.S. House of Representatives recently passed the Secure and Fair Enforcement (SAFE) Bank Act (HR 1996) by a vote of 321-101. This bill is designed to allow financial institutions to work in the cannabis industry safely and legally in states where cannabis has been legalized. The budding cannabis industry has typically dealt with cash-based transactions, since most banks are not comfortable accepting the funds. This has allowed for fraud and other crimes committed by bad actors. There are a few financial institutions and insurance companies that will work in the cannabis space, but they must fill out and file Suspicious Activity Reports with the federal government for these accounts and/or transactions.
By allowing banking, the government gets the benefit of having the funds go through the banking system so that they can be tracked, and, more important to the government, taxed properly. With a cash-only system, several states have missed out on potential tax revenues.
Now that this bill has passed the House of Representatives, it goes to the Senate. Many believe it will be more difficult to get the votes required to pass in the Senate. Still, there is hope. The bill has 32 cosponsors in the Senate, including six Republicans. The bill has been officially received into the Senate and referred over to the Committee on Banking, Housing, and Urban Affairs.