Safe Banking Act and The Cannabis Industry
The cannabis industry seems to be growing faster than ever. However, a huge hindrance to free access to banking services has always been problematic for cannabis businesses operating in different states of the USA.
Although several states, including Michigan, have legalized cannabis business, being inconsistent with the federal laws makes the banking service providers reluctant to transact with them. Thus, to play it safe, these banking services avoid making ties with cannabis businesses or even getting into any dealings.
The scenario seems to be settling down with the enactment of the SAFE Banking Act. The authorities continue their efforts, ensuring legal cannabis businesses have free access to financial banking services available to other businesses. The SAFE Banking Act authorizes all legal cannabis businesses to enjoy equal banking services. Stick around to learn more.
What is the SAFE Banking Act?
Secure and fair enforcement act, more commonly termed as SAFE Banking Act, was passed by the House of Representatives on July 14th, 2022. The said Act was passed as an amendment to the NDAA. Most analysts have a common take on this legal development.
The Act is meant to achieve the fundamental end to protect financial institutions along with the insurers that are on the toes to serve cannabis businesses that ensure operating according to the respective state legislation.
Federal laws do not legitimize cannabis, which poses serious legal threats of penalizing these financial institutions dealing with cannabis businesses. This seems problematic, not only for the financial institutions but the cannabis businesses too. These cannabis businesses would have been otherwise deprived of proper financial facilities.
With the passage of the SAFE Banking Act, legitimate cannabis businesses can make transactions with financial institutions. Also, these institutions are legally entitled to generate proceeds from these transactions lawfully.
Impacts of the Safe Act on the Cannabis Industry
The SAFE banking act can impact the cannabis industry at so many different levels from the grassroots level. It can help the flourishing industry set off on a prosperous journey by:
Creating more job opportunities
Supporting small cannabis businesses striving to grow
Raising funding and revenue
Foster Innovation
Not Having access to a banking system makes even the simplest business tasks like accepting credit cards, and writing checks hardly possible which hinders the way to growth even though cannabis businesses are legalized in certain states. The SAFE Banking Act not only eliminates financial safety risks but also makes the taxation process easier for state governments.
Ultimately, the SAFE banking act extinguishes the following powers of federal banking regulators and provides legal immunity to the state banking services and cannabis businesses that are operating within legally prescribed limits.
Interfering with a loan provided to a cannabis business owner.
Hindering the way of a lawful cannabis business from acquiring banking services within the legal limits.
Limiting or terminating the federal deposits of a bank solely because of being involved in lawful transactions with a legal cannabis business.
Final Thoughts
This legal development in the cannabis industry is a tremendous step that can help stride to prosperity easier for new cannabis businesses. You can make your journey even easier by utilizing Portal42's robust features to help your cannabis business grow into something big.