U.S. Treasury Secretary Reaffirms Support for Cannabis Banking Legislation

LOS ANGELES- In a significant development from Washington, U.S. Treasury Secretary Janet Yellen has once again vocalized her backing for critical cannabis banking legislation, emphasizing the urgency of resolving financial barriers faced by state-regulated cannabis enterprises. During a House of Representatives Appropriations subcommittee hearing, as reported by Reuters, Yellen underscored the pressing need for legislative action to bridge the gap between federal and state law, which currently leaves cannabis businesses in a precarious financial limbo.

The legislation in question, known as the SAFE (Secure and Fair Enforcement) Banking Act, aims to establish a safe harbor for financial institutions that provide services to cannabis businesses compliant with state regulations, despite the ongoing federal prohibition. This measure seeks to mitigate the risks and uncertainties faced by banks and credit unions, encouraging them to serve the cannabis sector without fear of federal reprisal.

Yellen’s advocacy for the SAFE Banking Act comes amid growing calls for reform within the cannabis industry, which has been hindered by a lack of access to traditional banking services. This situation has forced many businesses to operate on a cash-only basis, posing significant security risks and operational challenges.

The latest version of the cannabis banking bill, now dubbed the SAFER (Secure and Fair Enforcement Reform) Banking, successfully passed a markup hearing in the Senate Banking Committee last September. However, it has yet to be scheduled for a full Senate hearing, marking a continued impasse in its legislative journey since its initial introduction in 2019.

The Treasury Secretary’s repeated endorsements of cannabis banking reform highlight the federal government’s acknowledgment of the sector’s growing legitimacy and the critical need for financial infrastructure that supports its safe and responsible expansion. Yellen’s comments also reflect a broader shift towards recognizing the importance of aligning federal policies with state-level cannabis legalization efforts, aiming to address the banking conundrum that has long plagued the industry.

As the debate over the SAFE Banking Act and its implications for both the cannabis industry and financial institutions continues, stakeholders remain hopeful that Yellen’s renewed support will galvanize further action in Congress, paving the way for a resolution that harmonizes state and federal cannabis laws and fosters a more secure, inclusive financial ecosystem.