
Daniel T. McKillop
Partner
201-896-7115 dmckillop@sh-law.comFirm Insights
Author: Daniel T. McKillop
Date: March 2, 2022
Partner
201-896-7115 dmckillop@sh-law.comOn February 3, 2022, the U.S. House of Representatives voted 262-168 to adopt the Secure and Fair Enforcement (SAFE) Banking Act. This time around, the cannabis banking legislation was included as an amendment to the America COMPETES (Creating Opportunities to Meaningfully Promote Excellence in Technology) Act of 2022, which targets competition with China. The COMPETES Act now heads to the reconciliation process, and it is unclear if the SAFE Act amendment will remain in the final bill.
The SAFE Banking Act seeks to harmonize federal and state law by prohibiting federal regulators from taking punitive measures against depository institutions that provide banking services to legitimate cannabis-related businesses and ancillary businesses.
“Cannabis-related businesses — big and small — and their employees are in desperate need of access to the banking system and access to capital in order to operate in an efficient, safe manner and compete in the growing global cannabis marketplace,” sponsor Rep. Ed Perlmutter said in a statement.
Because marijuana remains illegal under the Controlled Substances Act (CSA), many financial institutions decline to provide services to the cannabis industry, forcing businesses to deal exclusively in cash. The unavailability of banking services not only makes cannabis-related businesses targets of crime, but also makes it more challenging for regulators to oversee their operations.
The SAFE Banking Act seeks to provide legal cannabis businesses with greater access to financial services. The legislation would specifically prevent federal banking regulators from:
Additionally, the SAFE Banking Act creates a safe harbor from criminal prosecution and liability and asset forfeiture for banks and their officers and employees who provide financial services to legitimate, state-sanctioned cannabis businesses, while maintaining banks’ right to choose not to offer those services. The SAFE Banking Act also provides protections for hemp and hemp-derived CBD-related businesses.
Despite having bipartisan and industry support, the SAFE Act’s likelihood of passage is still uncertain in the Senate. To date, the House has passed the cannabis banking legislation six times. Last year, it passed as a stand-alone bill and as an amendment to the fiscal 2022 defense authorization bill. Both times it failed to generate enough support in the Senate.
The SAFE Banking Act still faces challenges in the Senate from both sides of the aisle. Senate Minority Leader Mitch McConnell (R-KY) has criticized Democrats for including it in the China competition bill, characterizing it as a “poison pill.” Additionally, Democrats, such as Senate Majority Leader Chuck Schumer and Sen. Cory Booker (D-N.J.), continue to insist that lawmakers pass comprehensive cannabis reform rather than take a piecemeal approach.
Ultimately, the SAFE Banking Act’s ability to finally cross the finish line will likely come down to the conference process, specifically whether the two chambers come together to resolve the differences between the two bills. As the clock starts to run down on the Democratic majorities in the House and Senate, it is unclear if enough Democrats will be now willing to get behind passing more targeted, bipartisan cannabis reform.
Our attorneys regularly counsel businesses seeking to operate in the medical cannabis industry, as well as the emerging New York and New Jersey recreational cannabis markets. With offices in Washington, D.C., we can also work with legislators to enact cannabis legislation that provides greater regulatory certainty for the industry. With regard to the SAFE Banking Act and pending legalization bills, our advocacy may involve working with Senate offices to tailor legislation that incorporates client perspectives.
If you have any questions or if you would like to discuss the matter further, please contact Dan McKillop, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.
This article is a part of a series pertaining to cannabis legalization in New Jersey and the United States at large. Prior articles in this series are below:
Disclaimer: Possession, use, distribution, and/or sale of cannabis is a Federal crime and is subject to related Federal policy. Legal advice provided by Scarinci Hollenbeck, LLC is designed to counsel clients regarding the validity, scope, meaning, and application of existing and/or proposed cannabis law. Scarinci Hollenbeck, LLC will not provide assistance in circumventing Federal or state cannabis law or policy, and advice provided by our office should not be construed as such.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Over the past year, brick-and-mortar stores have closed their doors at a record pace. Fluctuating consumer preferences, the rise of online shopping platforms, and ongoing economic uncertainty continue to put pressure on the retail industry. When a retailer seeks bankruptcy protection, a myriad of other businesses are often impacted. Whether you are a supplier, customer, […]
Author: Brian D. Spector
Since his inauguration two months ago, Donald Trump’s administration and the Congress it controls have indicated important upcoming policy changes. These changes will impact financial services policies and priorities. The changes will particularly affect cryptocurrency, as well as banking rules and regulations. Key Regulatory Changes in Cryptocurrency For example, in the burgeoning cryptocurrency business environment, […]
Author: Dan Brecher
The retail sector has experienced a wave of bankruptcy filings over the last year. Brick-and-mortar businesses in financial distress include big-name brands like Big Lots, Party City, The Container Store, and Vitamin Shoppe. When large retailers seek bankruptcy protection, they are not the only businesses impacted. Landlords can be particularly hard hit. While commercial landlords […]
Author: Brian D. Spector
The bankruptcy legal landscape presents both challenges and opportunities for businesses navigating financial distress. Understanding current bankruptcy trends can help businesses make more informed and strategic decisions. Corporate Bankruptcy Filings Trending Upwards Bankruptcy filings continued to trend upwards in 2024. According to statistics released by the Administrative Office of the U.S. Courts, personal and business […]
Author: Brian D. Spector
In December, the U.S. Securities and Exchange Commission (SEC) announced charges against two privately held companies for failing to file a Form D notice, which is generally utilized for exempt securities offerings. Here, the SEC’s enforcement sends a strong message: compliance with regulatory requirements is not optional and failure to comply can have significant consequences. […]
Author: Kenneth C. Oh
On February 14, 2025, the Office of General Counsel (OGC) of the National Labor Relations Board (NLRB) under Acting General Counsel William B. Cowen issued Memorandum 25-05, “New Process for More Efficient, Effective, Accessible and Transparent Case handling.” The Memorandum rescinds nearly all of the Memoranda issued by his direct predecessor, Jennifer Abruzzo, setting the […]
Author: Matthew F. Mimnaugh
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!