House Passes Cannabis Banking Legislation As Part Of National Defense Authorization Bill
A massive step for legitimizing the cannabis industry in the U.S. has taken another tentative step forward.
Members of the House of Representatives voted on Tuesday night to include the SAFE Banking Act in the National Defense Authorization Act just before the latter's passage, Bloomberg reports. The defense spending bill now moves to the Senate, which has declined to advance the SAFE Banking Act the four previous times it reached that chamber on its own.
The SAFE Banking Act protects banks and financial institutions from being sanctioned by the federal government for doing business with cannabis-related firms. As it stands now, medical and recreational dispensaries are forced to do their business in cash, and all businesses in the cannabis industry finance themselves either through alternative capital sources or from their own balance sheet.
The legal limbo in which cannabis-related businesses have operated since states began legalizing marijuana for medical use has also led plenty of landlords to avoid leasing to dispensaries. The SAFE Banking Act enjoys broad support from the business community, Bloomberg reports, and the House's most recent attempt to get the Senate to take up the bill passed by a 321-101 vote in April, with votes from both sides of the aisle.
Rep. Ed Perlmutter, who introduced the amendment adding the SAFE Banking Act to the defense spending bill, argued that forcing cannabis-related businesses to deal exclusively in cash presents a security risk, Bloomberg reports. Regardless of the justification for its inclusion, nesting the banking legislation within the national defense bill improves its chances of passage, finance brokerage BTIG analyst Camilo Lyon said in a research note reported by Bloomberg.
"No senator wants to be viewed as holding up the massive, 1,700-page, must-pass NDAA simply because of SAFE banking,” Lyon wrote.