Will the Cannabis SAFE Banking Act pass into law in 2020?


On May 13, 2020, the House of Representatives released the content of a new COVID-19 stimulus bill.  Included in this bill is a provision to provide a safe harbor for financial institutions to bank cannabis related businesses (CRBs).  

 A separate SAFE Banking Act was passed in the House in 2019, but a companion bill was never brought to the floor in the Senate.  It was ultimately held up in the Senate Banking Committee by its Chairman, Senator Mike Crapo. However, by including it as part of the stimulus bill, which will certainly pass in the House, it forces the Senate to contend with the SAFE Banking Act.
 
Why it won’t pass in the Senate!
The House of Representatives stimulus bill has already been announced as dead on arrival by Mitch McConnell, the Senate Majority Leader.  This means that a compromise bill needs to be drafted that has the support of majorities in both the House and the Senate. Not finding that compromise in relatively short order would most likely trigger a material and immediate negative effect on the economy.  Never say never with Congress, but pressure will be put on both parties to find compromise legislation.  Safe Banking will be left out of the compromise bill if it is it not material enough to House members and can be offered up as a sacrifice to get more important things they desire like direct state and local government funding into the bill.

Why it will pass in the Senate! 
It is an expense neutral part of the bill and could bring in additional revenues.  As SAFE Banking has the bi-partisan votes to pass the Senate, but was held up in the banking committee by Senator Mike Crapo, it is unlikely that he will be able to hold up an entire stimulus bill for the same issues he raised at the end of the year.  It would have to be pretty important to Senate Republicans to make this a wedge issue at this moment and time.
 
The Bottom Line!
The bottom line on passage of the SAFE Banking Act in 2020 is that this is an election year.  That means that safe cannabis banking boils down to a political calculus.  As one of the Senate bill’s main sponsors is Corey Gardner, a Republican from Colorado who is in a very tough reelection fight against former Colorado Governor, John Hickenlooper, non-passage may result in a casualty that the Republican party doesn’t want in its precious defense for its majority.  On the other hand, there are a variety of House races that are at stake and there is the battle for the almighty fundraising dollar. 
 
What to keep any eye on!
Rhetoric!  Already conservative firebrand, Dana Loesch has been devoting much of her radio show to the outrage of cannabis banking being included in a bill designed for stimulus.  This started to get picked up by conservatives in Congress, but then was dropped as pressure mounted to not rail against Corey Gardner.  Should this become part of a conservative mantra and work its way down to the Senate floor, most likely SAFE Banking is doomed in the Senate.  If, however, Senator McConnell does not enter this into the public debate, SAFE Banking has a chance of being in the final stimulus bill and Senator Crapo won’t be able to hold it up.

If you would like to learn more about how your financial institution can safely and profitably bank the cannabis industry, contact us for a free webinar or for a free cannabis banking assessment at This email address is being protected from spambots. You need JavaScript enabled to view it. or contact HDCS, Inc. at This email address is being protected from spambots. You need JavaScript enabled to view it..

Andy Montgomery
HDCS, Inc. | CEO/Founder