Reported by Nicole Goodkind, CNN

(Summarized version presented below)

The Senate Banking Committee recently approved the SAFER Banking Act, a groundbreaking bill aimed at bridging the gap between financial institutions and cannabis companies. This bill, which has been in committee discussions since 2015, is now heading to the Senate floor for the first time after receiving a favorable vote. It addresses the longstanding issue of cannabis-related businesses operating primarily in cash due to federal legal ambiguity.

As the marijuana market continues to grow across the United States, the reliance on cash transactions has posed significant risks. Robberies at dispensaries and safety concerns for employees have become more prevalent. Senator Jeff Merkley, a sponsor of the bill from Oregon, emphasized that the increasing number of states adopting cannabis programs and witnessing these challenges has raised awareness and support for the legislation in the Senate.

The banking industry has faced difficulties due to the need to sever relationships with longstanding clients involved in the cannabis industry. While some institutions and credit unions offer services, they often come with higher fees compared to other businesses. Senator Merkley highlighted the potential for banks to tap into the billion-dollar cannabis industry, particularly in states like Oregon, where it has become a significant economic force.

The SAFER Banking Act addresses banking services, concerns about the scheduling of cannabis as a controlled substance, and the tax structure for cannabis businesses. While the bill is a crucial step, it doesn’t necessarily trigger changes in these other areas. Part of the bill is also focused on addressing reputational risk. It sends a message to regulators that they should not interfere with a bank’s decision to serve legal businesses based on moral judgments.

Additionally, the bill emphasizes restorative justice, acknowledging the unjust disparities in cannabis-related prosecutions, particularly affecting minority communities. It promotes equity and diversity in the cannabis industry, data collection on veteran-owned and minority-owned businesses, and facilitates homeownership for those previously blocked from federal mortgages.

Overall, the passage of the SAFER Banking Act could have a significant impact on the cannabis industry and related financial services, as well as address issues of social equity and justice.

Read original report: https://www.cnn.com/2023/10/02/investing/premarket-stocks-trading/index.html