House passes SAFE Banking Act, protecting institutions providing financial services to cannabis-related businesses.

Photo © iStockphoto.com/ Kuzma

The House of Representatives has passed the Secure and Fair Enforcement (SAFE) Banking Act of 2019, a bill that creates protections for depository institutions providing financial services to cannabis-related legitimate businesses.

The bill defines “cannabis-related legitimate business” as “a manufacturer, producer, or any person or company that, (A) engages in any activity described in subparagraph (B) pursuant to a law established by a State or a political subdivision of a State, as determined by such State or political subdivision; and (B) participates in any business or organized activity that involves handling cannabis or cannabis products, including cultivating, producing, manufacturing, selling, transporting, displaying, dispensing, distributing, or purchasing cannabis or cannabis products.”

Under the bill, Federal banking regulators may not:

1. Terminate or limit the deposit insurance or share insurance of a depository institution solely because the institution is providing financial services to a cannabis-related legitimate business.
2. Prohibit, penalize, or discourage a depository institution from providing financial services to cannabis-related legitimate business, or to a State, political subdivision of a State, or Indian Tribe that exercises jurisdiction over cannabis-related legitimate businesses.
3. Recommend, incentivize, or encourage a depository institution not to offer financial services to an account holder solely because they are a cannabis-related legitimate business or involved with one.
4. Prohibit or penalize a depository institution from engaging in a financial service with a cannabis-related legitimate business or service provider.

“This is a win for legitimate businesses who are selling CBD products, but the bottom line is it doesn’t change the fact that congress needs to direct FDA to set a safe level of consumption for CBD,” said Daniel Fabricant, PhD, president and CEO of the Natural Products Association (NPA; Washington, DC), which worked with Rep. Andy Barr (R-MD) to include language in the bill that includes CBD businesses. “We will continue to work with the House and Senate to ensure that consumers have the information they need to make informed decisions about their health, especially when it comes to the fast-growing CBD marketplace.”