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Cannabis Update: Will the SAFE Banking Act Become Law?

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Updated

Not a law yet

On March 26, the House Committee passed the SAFE Banking Act of 2019 with a 45–15 majority. However, this was just the beginning stages of the legislative process. The act will need to pass the House as well as the Senate before it is sent over to the President.

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SAFE Banking for Ancillary

Nonetheless, there is no reason for companies (HMMJ) such as Canopy Growth (WEED) (CGC), Aphria (APHA), KushCo Holdings (KSHB), Innovative Industrial Properties (IIPR) not to be optimistic.

The act also has a provision that will protect the ancillary businesses that operate in the cannabis sector in the US, which means that companies that operate legitimate ancillary cannabis-related businesses like packaging, supply chain services, accessories, equipment, lightings, and grow systems would also be able to access the services of financial institutions.

Without the SAFE Banking Act, or similar legislation that enables the traditional banking system to conduct business with cannabis businesses, expansion opportunities could be limited. With most transactions carried out through a financial intermediary, cannabis companies that legitimately operate their businesses are often left without the most important lifeline of the business, the banking system.

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