Cannabis Update

SAFE Banking Act

Illinois State Treasurer Michael Frerichs urged swift passage of federal legislation that will bring safety, certainty and security to the financial institutions that support the industry.

The U.S. House of Representatives recently passed the Safe Banking Act 321–103 with strong bipartisan support. The legislation would allow financial institutions such as banks and credit unions to legally provide financial services to legitimate cannabis businesses.

The legislation now goes to the Senate for approval. Such legislation was first introduced in 2013. Frerichs has urged Congress and President Trump to bring clarity to the cannabis‑banking relationship since Trump’s election in 2016.

Current federal law considers cannabis on the same level of heroin or cocaine and prohibits financial institutions from supporting the cannabis industry. Penalties for doing so could include federal officials closing financial institutions. However, these penalties are at odds with 33 states and the District of Columbia that have passed laws legalizing marijuana in some form.

This legislative effort touches more than cannabis growers, storefront businesses and banks. Plumbers, electricians, attorneys and landlords who service the industry also have their banking relationship jeopardized by the federal regulations.

Frerichs is the state’s chief banking officer. Money paid to the state for licenses, taxes and fees is invested through the treasurer’s office. That is why Frerichs advocates action at the state and federal level to rectify this banking conflict.

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