Although the national and global cannabis industry continues to grow and become more regulated, many cannabis-related businesses are still banned from accessing federally regulated and insured centralized banking systems. At GreenWrap Insurance Solutions, our agents have more than 20 years of combined experience and use that knowledge to interpret industry trends and share them with our customers. Here, we discuss insights on how the Secure and Fair Enforcement (SAFE) Banking Act could influence the cannabis industry and change things for the better.
What is the SAFE Banking Act?
The Secure and Fair Enforcement (SAFE) Banking Act is a bill that, if passed, would prevent federal regulators from interfering with or disciplining financial institutions for engaging with legitimate cannabis-related firms. It would reduce the difficulties that cannabis businesses face as a result of their exclusion from the commercial loan market, allowing them to minimize cash on hand through safe and reliable banking services. Although this law would not legalize cannabis and many individuals would prefer that it be legalized at the federal level first, the SAFE Banking Act would help close the gap between state and federal laws.
Impacts of the SAFE Banking Act
Since cannabis-related businesses are still barred from using federally regulated and insured banks, they don’t have access to the same quality financial tools and solutions as other thriving businesses, such as savings accounts, credit card systems, and more. Here are the ways in which the passage of the SAFE Banking Act would change that for the cannabis industry:
Increased Access to Financial Solutions
Passage of the SAFE Banking Act would send a clear message to financial institutions that they will not be punished for interacting with cannabis businesses. These financial institutions will in turn feel more comfortable supporting establishments if there is no chance of breaching federal cannabis prohibition. As a result, all legal businesses in the cannabis industry would have access to the same spectrum of vital services.
As mentioned above, cannabis-related businesses can’t use savings accounts or accept credit cards as a result of the limited financial services provided to them. This forces these businesses to hold large amounts of cash on hand, which can be a safety risk since cash-intensive enterprises are often targeted for robberies. The SAFE Banking Act intends to reduce the amount of cash kept in-house by cannabis businesses and promote public safety by making a complete range of financial services available to them.
Increased Industry Growth
With increased access to financial resources, the SAFE Banking Act would allow cannabis-related companies to invest more in employees, innovation, and growth. Small businesses in the cannabis industry with limited financial tools will also be able to apply for loans and acquire the capital they need to begin their business or fuel expansion plans. This will lead to the continued growth and success of the cannabis industry.
Learn More from Our Agents Today
Laws and regulations can affect your operation and the cannabis industry as a whole. At GreenWrap Insurance Solutions, we understand the challenges that cannabis businesses face in trying to get coverage and financial resources. We’re committed to providing both customized insurance packages and vast industry knowledge to businesses across the entire spectrum of the marijuana industry. Contact us today to see how we can help your business in North America, Europe, the Caribbean, or sectors of Latin America.