When it comes to federal cannabis legislation, it seems that the Secure and Fair Enforcement (SAFE) Banking Act could be the cannabis industry's own version of "Waiting for Godot."
For the unfamiliar, the absurdist play has become a phrase used in many ways over the years, be it in personal relationships, business dealings, even government action. No matter the situation or experience, two constants remain: Godot never shows up, and the main characters continue to wait for someone that they're not even sure exists.
While we all have a perception and hope of what the SAFE Banking Act will achieve, no one truly knows what to expect and, more maddening, when to expect it. Consensus holds that SAFE will pass someday — so, we stand here and wait for it to be passed into law by Senate Democrats and Republicans. This goes for other pieces of legislation as well, such as the Cannabis Administration and Opportunity Act, the Strengthening the Tenth Amendment Through Entrusting States Act, or the Capital Lending and Investment for Marijuana Businesses (CLIMB) Act.
Over 40 states and territories have made cannabis legal already. This is a burgeoning market that is showing no signs of slowing down, and an increasing number of financial institutions are building programs to take advantage of the significant revenue opportunities presented by banking cannabis-related businesses, or CRBs.
A large number of financial institutions have been reluctant to work with CRBs. However, a new mindset is increasingly taking hold: The rewards associated with banking a state-licensed CRB outweigh the risks inherent to banking an industry that is currently federally prohibited. The silver bullet that these institutions continue to wait for seems to be the passing of the SAFE Act.
The current misconception is that passing federal legislation like SAFE would allow established banks and credit unions to work with CRBs without the fear of being penalized. In return, new and legacy businesses could enter the legal cannabis market with the assurance of being financially protected and secure. In reality, SAFE doesn't eliminate the need for compliance, but in fact will make the current rules more strict. The key difference is that they will be better defined.
Lawmakers recently reviewed the legislation, which was first introduced by Rep. Ed Perlmutter D-Colo., during a Senate Banking Committee hearing focused on insurance issues. In June, the Senate rejected, for the sixth time, the bipartisan marijuana banking legislation.
There was also a recent announcement that SAFE was going to be taken up in the Senate before the August recess, which again had the industry waiting in suspense. Unsurprisingly, the deadline came and went. But don't worry, these messengers will come back yet again with another new promise. That is guaranteed. Much like the promise of Godot in Beckett's play, SAFE, CAOA, STATES or CLIMB are coming. That message is the only constant. And it has been for years.
The good news for CRBs is that there are hundreds of banks and credit unions that have already stepped away from the ground where those main characters stand and are now actively serving this growing ecosystem.
"Waiting for Godot" is a parable about the futility of blind faith, and banks considering working with the cannabis industry should learn from it. The message is clear — banks and credit unions are currently squandering the opportunity to benefit from working with cannabis businesses while they wait for SAFE. There is plenty of technology and there are plenty of services to ensure compliance, so the time to act is now. You don't want to spend your life waiting for a promise that is seemingly guaranteed but has a real chance to be a mirage.
