Many in the AML/CFT community have been watching the unfolding of the Secure and Fair Enforcement (SAFE) Banking Act for some time now with no significant progress. If signed into law, the SAFE Act would allow banks to provide services to cannabis-related businesses (CRBs) in states that have passed the legalization of marijuana in some form. This would enable CRBs to transact business by means other than cash, providing an auditable trail for financial institutions to monitor for suspicious activity.
The SAFE Banking Act hit a wall in Congress last year after lawmakers excluded it from a $1.7 trillion government funding bill. It was the seventh time the legislation failed to get through the Senate after passing in the House of Representatives. Recognizing the urgent need for a legislative solution to cannabis banking challenges, members of Congress introduced the SAFE Banking Act of 2023 to bridge the gap between state and federal marijuana laws.
The new 2023 version of the SAFE Banking Act was introduced in the House of Representatives (HR2891) and the Senate (S1323) in May 2023. Previous bills have had bipartisan support, but this is the first time both chambers of Congress have discussed the SAFE Banking Act simultaneously. Although the new proposed legislation does not remove marijuana from the classification as a Schedule 1 drug under the Controlled Substances Act, it gives certain safe harbor for financial institutions that provide traditional banking services to state-legalized cannabis-related businesses.