On Wednesday, the Senate advanced a new bill aimed at granting the marijuana industry access to banking services.
The Secure and Fair Enforcement Regulation Banking Act, introduced last week by a bipartisan group of senators, seeks to protect banks and other financial institutions that provide services to businesses operating legally under state marijuana laws.
The Senate Banking Committee voted 14-9 to move the bill forward to the full Senate floor. Sen. Jeff Merkley, a Democrat from Oregon and the bill’s lead sponsor, described the advancement as a “historic moment” and a demonstration of “significant bipartisan cooperation.”
Merkley emphasized the risks of forcing legal marijuana businesses to operate exclusively in cash, including increased opportunities for robberies, muggings, money laundering, and organized crime.
“The only people benefiting from the current system are criminals,” Merkley stated. He expressed his commitment to building bipartisan support to pass a law that ends the cash-only cannabis economy and enhances public safety nationwide.
The bill is also supported by Sens. Steve Daines, R-Mont.; Kyrsten Sinema, I-Ariz.; and Cynthia Lummis, R-Wyo., along with Majority Leader Chuck Schumer, D-N.Y.
In a joint statement, the senators highlighted that the legislation would improve safety for communities and small businesses by enabling legal cannabis enterprises to access traditional financial services such as bank accounts and small business loans.
Additionally, it would prevent federal bank regulators from closing accounts based solely on reputational risk.
Despite the legalization of marijuana in 39 states for either recreational or medical use, the sector has faced challenges in scaling due to its classification as a Schedule I substance and federal prohibition.
These factors pose risks for banking institutions, limiting access to financing and broader market opportunities. Consequently, state-legal cannabis businesses are compelled to operate with cash, leading to issues such as robbery and organized crime.
The MJBiz Factbook projects that combined medical and recreational cannabis sales in the U.S. will reach $33.6 billion by the end of 2023, driven by the expansion of adult-use markets in various states.
Wednesday’s vote was the Senate’s first consideration of this legislation. An earlier version of the bill, known as the SAFE Banking Act, passed the House seven times but failed to advance in the Senate under both Democratic and Republican control.
Last year, the measure was excluded from a $1.7 trillion government funding bill. The bill may encounter greater difficulty if it faces the GOP-controlled House, where it might face resistance.
“I think it probably passes the banking committee, but I think it doesn’t go anywhere in the House,” said Ian Katz, an analyst with Capital Alpha Partners. “Republicans seem to be souring on it,” he added.
The new bill also introduces stricter requirements for federal regulators, including a prohibition on terminating marijuana-related accounts without “valid reason” and on denying banking services based on “personal beliefs or political motivations.”
