SAFE Banking Act: Financial Services for Legal Cannabis-Related Businesses (CRBs)

Legal cannabis-related businesses (CRBs) face challenges obtaining bank accounts, and commercial property owners face legal challenges of taking on CRB tenants without safe harbor protections.

Federal and state law differences on cannabis policy leave banks and real estate providers trapped between their mission to serve lawful businesses in local communities—and the threat of federal enforcement action.

Position

The Roundtable supports the passage of The Secure and Fair Enforcement Regulation (SAFER) Banking Act, which would prohibit a federal banking regulator from penalizing a depository institution for providing banking services to a legal CRB, permitting them to utilize banking services. Further, proceeds from CRB transactions would not be subject to anti-money laundering laws, as these transactions would be viewed as lawful activity. 

Protections like SAFER  provide commercial property owners a safe harbor when leasing space to a CRB, as their mortgages could not be subject to corrective action by a bank. 

In states where prescription and recreational marijuana use is legal, there is increasing demand for commercial space from legal CRBs. Real estate owners, lessors, brokers, and financiers need certainty when transacting with these businesses.

Background

Federally insured financial institutions are unable to serve legitimate cannabis-related businesses due to divergent state and federal cannabis laws. The SAFER Banking Act seeks to remove these ambiguities at the federal level, clearing the path for more financial institutions to serve the legitimate cannabis industry.

Currently, 47 states, four U.S. territories, and the District of Columbia have legalized some form of marijuana for either medicinal or recreational purposes. Despite this widespread legalization at the state level, marijuana remains an illegal Schedule I controlled substance under federal law.

Unable to use a bank account, dispensaries and other legal CRBs must operate on a cash basis. The risk of crime thus increases, and tax revenues to pay for infrastructure and other government services are potentially lost. Commercial property owners could also face legal challenges of taking on legal CRB tenants without safe harbor protections.

For more information and recent updates, reference our resources below.

Resources

MORE ISSUES
MORE ISSUES
Restoring Liquidity in CRE Markets and Protecting Capital Formation
Halting Pro-Cyclical Policy Measures and Increases in Regulatory Capital
Restrictions on Foreign Investment in U.S. Real Estate
Beneficial Ownership & the Corporate Transparency Act
Commercial Insurance Coverage: Pandemic Risks & Natural Catastrophes
SAFE Banking Act: Financial Services for Legal Cannabis-Related Businesses (CRBs)