Earlier this week, Congress approved the SAFE Banking Act, a law that would make it possible for financial institutions such as banks to conduct business with cannabis companies that are licensed in states which allow marijuana for either recreational or medical use, or both. This law is intended to remove the fear banks have of being penalized by federal authorities since marijuana is currently illegal at the federal level.
The legislators in the House of Representatives passed the bill in a 321-101 vote, and now the bill will be sent to the U.S. Senate for consideration.
The bill provides clarification that any proceeds generated by duly licensed cannabis firms within states with enabling cannabis laws shouldn’t be looked at as illegal, and the law instructs federal regulatory agencies to draft appropriate guidelines through which such banking activities could be overseen at a national level.
Generally, banks have been hesitant to transact business with entities that sell cannabis or cannabis-related products. This reluctance has been based on the fear of being found in transgression of federal regulations.
Consequently, businesses in the cannabis industry were left with limited options for financial transactions. They had to do business with smaller financial institutions (i.e., credit unions, for instance) or were forced to transact in cash. Analysts say this lack of collaboration with banks has held the development of this industry in jurisdictions where it is legal.
Several banking associations have lobbied endlessly for the passing of the proposed SAFE Banking Act. In their view, banks have been put in a difficult position of having to listen to the calls of state regulators asking banks to accept cannabis industry clients while fearing federal regulators who regard marijuana as a highly controlled substance that shouldn’t be available for use.
By urging Congress to act on this legal conundrum, banking companies hope to get a definitive legal position upon which to decide whether or not to do business with state-legal marijuana companies. At the moment, 36 states have systems in place to regulate medical marijuana operators while 17 states have permitted the recreational use of cannabis.
The bill will now head to the Senate where Majority Leader Chuck Schumer has severally expressed his support for the cannabis banking bill as well as other policy reforms with respect to marijuana. He even went on to say that the legislative chamber is ready to move forward regardless of the President’s views on the matter.
If this SAFE Banking bill is finally enacted into law, marijuana sector players such as Grapefruit USA Inc. (OTCQB: GPFT) will have one less hurdle to face as they go about their state-legal activities.
NOTE TO INVESTORS: The latest news and updates relating to Grapefruit USA Inc. (OTCQB: GPFT) are available in the company’s newsroom at http://cnw.fm/GPFT
CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.
To receive instant SMS alerts, text CANNABIS to 21000 (U.S. Mobile Phones Only)
For more information please visit https://www.CNW420.com
Do you have questions or are you interested in working with CNW420? Ask our Editor
CNW420 is part of the InvestorBrandNetwork.