The Secure and Fair Enforcement Banking Act

It’s a long, time-honored tradition to include seemingly unrelated reforms in larger legislative proposals. This is what’s happening with the Secure and Fair Enforcement Banking Act, or SAFE. A part of the bill proposes legal protection for banks working with cannabis businesses, but what does this mean for federal legalization? Let’s take a look.

The Federal Government and Marijuana

Despite widespread legalization in states across the U.S., marijuana remains illegal at the federal level, which means there are endless issues with interstate sales and banking. Dispensaries can’t sell weed over state lines and growers can’t transport cannabis products to out-of-state buyers. Banks also face penalties for dealing with cannabis businesses and often refuse to accept clients who work in the industry.

What is the SAFE Act?

The SAFE Act could change the way cannabis businesses operate. Essentially, the bill would prohibit punishing banks for dealing with the marijuana industry and make cannabis profits legitimate instead of “proceeds from unlawful activity.”

This would make banking easier for cannabis businesses who have had to rely on cash-only transaction and profits for years. In many cases, this bill comes as a much-needed break from strict regulations that choke out business in parts of the United States.

However, the trouble with the SAFE Act is that it’s a part of a bigger military spending bill. It’s not uncommon to include unrelated matters in a large-scale reform bill, but marijuana banking has very little to do with the military industrial complex which could prevent some legislators from voting in favor of it.

Support and Pushback

Supporters of the SAFE Act see it as a monumental shift from harsh policies created during the war on drugs to a more inclusive take on cannabis legislation.

Starting in the 70s and reaching a fever pitch during the 90s, the war on drugs was a movement against drugs in America. This movement crossed state lines and involved several presidents from Nixon to Bush.

Nixon declared war on drugs in response to increased uses of marijuana and other substances on college campuses, in black neighborhoods, and in poor communities. At face value, this “war” seemed like a reasonable response to increased drug use, but in reality it became an attack on people of color and the poor.

By the 1980s, the war on drugs expanded due to the use of cocaine. However, the people most often arrested for cocaine use or sale weren’t celebrities who took coke at parties – it was people of color in poor neighborhoods who got involved in drug trafficking to survive.

Senator Cory Booker (D-NJ) says that the SAFE Act could change the way law enforcement treats drug crimes and help lay the groundwork for future bills that would allow expungement for weed crimes and help people reenter society.

Sen. Booker said, “I think it’s really important that we get the SAFE Banking Act done but to do it without doing other things, makes the other things even harder to get done.” Booker is optimistic about the prospect of legalization but by isolating this one aspect of the issue the likelihood of getting other marijuana bills through congress becomes more difficult.

On the other hand, critics of marijuana reform worry that this will lead to national legalization, which their constituents fear. There’s still a lot we don’t know about the long-term effects of marijuana, and many skeptics are concerned about how national legalization will effect public safety.

What Happens Now

The SAFE Act still needs to go through Congress, but it doesn’t seem likely that it will pass. It’s a small part of a large military spending bill that addresses post-war concerns that are more important to constituents than banking for cannabis growers.

In general, federal legalization isn’t as impossible as it once was, but there is a growing rift between parties that could jeopardize any motion to legalize marijuana in the future. Until legalization can happen on a national scale, business owners will continue to submit to contradicting regulations and pay costly fees for licenses and permits.

Protect Your Business

At Purdy & Bailey, LLP we understand how complicated owning a cannabis business can be. That’s why we offer a variety of legal services, from business formation to licenses and permits, so you can get the help you need to succeed. Our team of experienced legal professionals is well-versed in cannabis law and you can rest assured that we have your best interest in mind.

If you are a cannabis business owner looking for legal help with your business, contact Purdy & Bailey, LLP for more information.

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