In a surprise moment of bipartisanship for a typically divided Congress, the House of Representatives on September 25 passed HB 1595, the Secure and Fair Enforcement Banking Act (“SAFE Act”) by a vote of 321-103.[1] The SAFE Act protects financial institutions providing services to cannabis-related legitimate businesses (“CRLBs”), including banks, credit and loan providers, and insurance agencies.[2] Such institutions would be protected from federal regulators taking adverse action against them for their participation in the legal cannabis industry.

Many industry insiders see the SAFE Act as a huge boon. Despite being an 8 billion dollar market in the United States, most cannabis business has historically been conducted in cash, due to a lack of available credit and banking services.[1] This has led to higher transaction costs, an inability to receive loans and other forms of financial assistance, and a higher degree of tax diversion than is seen in other, similar industries.[2] It also has left the industry open to theft and violence, including the murder of a Denver man outside a dispensary in 2016.[3]

Taking the cash out of the industry could make everyone safer and make business run smoother in a variety of ways, from sales to payroll, insurance, and taxes. The SAFE Act could also bolster the legitimacy and stability of the budding marijuana industry by giving the biggest financial players a seat at the table, with all their attendant political power.

Yet for some activists, this is also the bill’s biggest downside.[4] By providing federal protections for large financial institutions before such protections are extended to ordinary citizens participating in the industry, the SAFE Act could potentially exacerbate inequalities and undercut efforts to build social equity into the foundation of the cannabis industry.[5] It is also feared that the SAFE Act could derail more comprehensive efforts to protect and regulate cannabis at the federal level, by separating the interests of banks from those of the industry at large.[6]

The SAFE Act is one of several pieces of cannabis legislation currently moving through the Congress. Another, the Clarifying Law Around Insurance of Marijuana Act (“CLAIM Act”) would provide further protections for insurance companies insuring the cannabis industry[7]. And a third, the Marijuana Opportunity Reinvestment and Expungement Act (“MORE Act”) would remove marijuana from the Controlled Substance Act altogether, and start addressing the disproportionate consequences of the War on Drugs on disadvantaged communities across America[8].

As Queen Adesuyi, policy coordinator for the National Drug Policy Alliance, put it in an interview with Marijuana Moment, “We need to ensure that the sequencing of federal marijuana bills, especially under House Democratic Leadership, is well thought out and done in a way that centers the millions directly impacted by overenforcement. We want to avoid the banking bill becoming Congress’ only bite at the apple for cannabis reform this session.”[9]

The SAFE Act faces a difficult road ahead in the Senate, where Majority Leader Mitch McConnell has already stated his opposition. Whether the political weight of major financial institutions will be enough to push the bill over the threshold for passage remains to be seen.

-Jake Ziering

[1] The SAFE Banking Act Allowing Banks to Work with Marijuana Firms is Controversial. This is Why, Newsweek, Sep. 27, 2019,

[2] Supra note 3.

[3] Supra note 3.

[4] Civil Rights Groups Urge Congress to Delay Marijuana Banking Vote, Marijuana Moment, Sep. 17, 2019,

[5] Supra note 6.

[6] Supra note 6; Statement on House Passage of Marijuana Banking Bill, Drug Policy Alliance, Sep. 25, 2019,

[7] High Hopes, Higher Hurdles for Pro-Cannabis SAFE Banking Act, Insurance Journal, Oct. 3, 2019,

[8] Supra note 6.

[9] Supra note 6.

[1] House Passed Landmark Marijuana Banking Bill, Westword, Sep. 25, 2019,

[2] An Expert Analysis of the SAFE Banking Act, MG Retailer, June 3, 2019,

2 thoughts on “The SAFE Banking Act

  1. 4 years later and Cannabis banking has still not made any advancements and whats more is that the Farm Bill classifies Hemp as completely legal in the USA as long as there is .3% or less THC by dry weight and it is still classified by the Banks and Underwriters as Cannabis! So frustrating. If it wasn’t such a healing plant it wouldn’t be so regulated and illegal!

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