“The SAFE Banking Act would go a long way toward improving safety, transparency, access and justice in the cannabis industry.”

On Thursday, the House Financial Services Committee voted on a proposed bill that would protect financial institutions that provide services to legally operated cannabis businesses. The bill addresses a much-needed issue for marijuana-related businesses as banks have often stayed away from the industry due to its varying legal status.

After amending the bill to allow for providing a safe harbor for insurance companies and give women- and minority-owned organizations better access to financial services, the House Committee voted 45-15 to advance the bill. Ohio Republicans Warren Davidson and Steve Stivers, as well as Democrats Denny Heck of Washington state and Ed Perlmutter of Colorado, initially introduced the bill.

Bill Would Help Struggling Cannabis Businesses Obtain Financing

Typically, banks are leery of financing cannabis-related businesses since the federal government regards marijuana as illegal. Consequently, many cannabis industries strictly use cash, which leads to criminal concerns such as security issues and money laundering.

The proposed bill would help cannabis businesses gain the opportunity to obtain financing and expand their companies – especially those who had previously struggled to obtain funding.

Steve Hawkins, executive director of the Marijuana Policy Project, told the Associated Press in a statement: “This is a historic and critical step forward for the nation’s burgeoning cannabis industry. Regardless of where members stand on legalization, they can agree that it is in the public interest to make banking available to cannabis businesses in states where it is legal.”

Major Financial Industry Groups Support the Bill

The Credit Union National Association and the American Bankers Association, among other groups, have shown their support for the bill, stating that the discord between state and federal law has put a strain on its members.

Having access to conventional banking practices could have a “profound” economic effect on the creation of tax revenues and jobs, according to Kevin Murphy, CEO of Acreage Holdings, a New-York-based multistate company.

One aspect of the proposal is that it would not allow officials who regulate federal banking to penalize banks that accommodate businesses in the cannabis industry, as long as they adhere to state laws.

Aaron Smith, executive director of the National Cannabis Industry Association, said in a statement: “The SAFE Banking Act would go a long way toward improving safety, transparency, access and justice in the cannabis industry.”

According to a report by Marijuana Business Daily, the bill will go to the full House for consideration.