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USA: Safer Banking Act takes a step towards financial freedom for the cannabis sector

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In an important step for the cannabis industry, the SAFER Banking Act triumphed in its first review by the Senate, thus advancing to a full vote in the Senate. The SAFER (Secure and Fair Enforcement Regulation) Banking Act, perfected by bipartisan efforts, has as its main objective to introduce traditional commercial channels and transparency in cannabis companies. 

The result of the Senate Banking Committee's vote in favor (14-9) of the cannabis banking bill now paves the way for state-licensed cannabis companies. By offering a safe haven to financial institutions, this legislation promises a new era of financial stability for the sector.

A historic breakthrough in the Senate

This SAFER Banking Act vote in the Senate is historic. Although the SAFE Banking Act has passed the House of Representatives seven times since 2019, it is the SAFER Banking Act that is on the threshold of the Senate, the result of tireless bipartisan negotiations that lasted almost four months.

Sherrod Brown, chairman of the Senate Banking Committee, emphasized the importance of the bill, stating unequivocally that it is a necessary step. He highlighted his role in ensuring the safety of legal cannabis businesses, their employees and communities. Safety, a sentiment shared by Senator Steve Daines, is at the heart of this legislation. Addressing the vulnerabilities of a cash-only model, the law seeks to make legal cannabis businesses less susceptible to theft, tax evasion and organized crime, thereby promoting a safe environment for commerce.

Challenges and local economy

The SAFER Banking Act is not without its challenges. Section 10, a point of contention, has sparked debate around the potential revival of the controversial “Operation Choke Point”. However, the law favors due diligence over blanket denials, promoting individual customer scrutiny and rejecting the notion of “reputational risk” as a basis for account termination.

Furthermore, the law gives priority to equitable opportunities. It ensures that financial institutions not only serve cannabis businesses, but also extend their services to rural areas, low-income communities, and tribal regions. This commitment to financial inclusion underscores the law's broader social impact, which transcends the cannabis industry.

However, despite its advances, the SAFER Banking Act faces some voices against the new law. Senators like Raphael Warnock have expressed concerns about the law's social justice dimensions, calling for tangible measures that address the historic injustices caused by the war on drugs. Although his proposed amendment was not accepted, it serves as a reminder of the complex interplay between policymaking and social equity.

What future for the cannabis financial sector?

The Senate Banking Committee's approval of the SAFER Banking Act signifies progress, but it is just one chapter in the larger narrative of cannabis legalization. The debate persists: should cannabis money be legalized before the broader legalization of cannabis itself? This question remains, entangled in a web of legal, social and economic considerations.

The advancement of the SAFER Banking Act is a beacon of hope for the cannabis industry, promising financial stability, security and inclusion. Pending its fate in the Senate, the bill is a testament to the power of bipartisan collaboration in building a more equitable and secure future for cannabis businesses and the communities they serve.

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