As autumn’s leaves began to fall, the U.S. House of Representatives passed the Secure and Fair Enforcement Banking Act of 2019 (SAFE Banking Act), giving cannabis businesses long-awaited access to federal financial institutions. In announcing the bill’s passage, one of its sponsors, Ed Perlmutter, D-Colorado, stated: “This is a huge milestone in reforming federal cannabis laws and reducing the public safety risk in communities across the country.”

Representatives Ed Perlmutter, D-Colorado; Denny Heck, D-Washington; Steve Stivers, R-Ohio; and Warren Davidson, R-Ohio, originally introduced the bill, which had over 200 cosponsors. The bill passed in the House on September 25, 2019 by a vote of 321 to 103. It was received in the Senate and read twice on September 26, 2019, and then referred to the Committee on Banking, Housing, and Urban Affairs for consideration.

The bill’s overview states,

“To create protections for depository institutions that provide financial services to cannabis-related legitimate businesses and service providers for such businesses, and for other purposes.”  HR 1595.

The recreational use of cannabis is legalized in 11 states -Alaska, California, Colorado, Illinois, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont, and Washington), as well as the District of Columbia, the Northern Mariana Islands, and Guam.

Despite marijuana being legal in California and several U.S. states, districts, and territories, it is still illegal under federal law. Thus, any financial institution chartered and regulated by the federal government is apprehensive or unwilling to do business with any entity involved with growing or selling cannabis, even though the enterprise is a state-legal business.

Currently, hundreds of licensed and regulated businesses are in the untenable situation of having no access to the banking industry. As a result, they are unable to accept credit cards, deposit revenues, or write checks to pay employees, expenses, and taxes. The SAFE Banking Act allows cannabis businesses to operate as other businesses operate.

One of the backers of the bill, the National Cannabis Industry Association, stated,

“The SAFE Banking Act as approved in the House would prevent federal banking regulators from punishing banks for working with cannabis- and hemp-related businesses that are obeying state laws.” “The bill would protect ancillary businesses that work with the cannabis industry from being charged with money laundering and other financial crimes and requires the Financial Institution Examination Council to develop guidance to help credit unions and banks understand how to lawfully serve cannabis businesses.”

With Mike Crapo, R-Idaho, Committee Chairman of the Senate Banking Committee, stating that cannabis banking legislation was under strong consideration in the Senate. Senators, Cory Gardner, R-Colorado, and Jeff Merkley, D-Oregon, introduced legislation in April. The Senate Banking Committee held a hearing in July.

As federally chartered banks are reluctant to provide loans for budding enterprises or even handle the cash proceeds of established marijuana businesses, many owners and operators deal entirely in cash, which is a potential public safety risk because it presents an easy target for theft. The SAFE Banking Act provides a long-awaited solution to this problem.

The attorneys at Glass & Goldberg in California provide high quality, cost-effective legal services and advice for clients in all aspects of commercial compliance, business litigation, and transactional law. Call us at (818) 888-2220, send an email inquiry to or visit us online at to learn more about the firm and to sign up for future newsletters.

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