Murchison & Cumming LLP

Cannabis Banking Included in Recent COVID-19 Relief Package

May 12, 2020

By: Kelly Hayes

Today, the House of Representatives debuted the most recent COVID-19 Federal Relief package - the Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES Act), and guess what is buried on page 1066?

Why, it’s Cannabis Banking!

Initially introduced in 2019, the Secure and Fair Enforcement Banking Act (SAFE Banking Act) passed the House of Representatives, but has stalled in the Senate Committee on Banking, Housing, and Urban Affairs.

Now called the SAFE Banking Act of 2020, it’s being included in the second COVID-19 federal relief bill. If passed, the bill would open up banking services and products to “cannabis-related legitimate businesses” which is defined as:

The term ‘‘cannabis-related legitimate business’’ means a manufacturer, producer, or any person or company that-
(A) engages in any activity described in subparagraph (B) pursuant to a law established by a State or a political subdivision of a State, as determined by such State or political subdivision; and
(B) participates in any business or organized activity that involves handling cannabis or cannabis products, including cultivating, producing, manufacturing, selling, transporting, displaying, dispensing, distributing, or purchasing cannabis or cannabis products.

In the wake of the ongoing Pandemic, the CDC has recommended that retail and food workers minimize their handling of cash by using credit cards or touchless payment options, but cannabis businesses don’t have this option available.

Financial institutions will not bank will cannabis businesses, since cannabis remains illegal as a Schedule I controlled substance under the federal Controlled Substances Act. Financial institutions are subject to federal laws and regulations including potential civil and criminal liabilities under the CSA, anti-money-laundering statutes, the Banking Secrecy Act, and the Patriot Act. This means cannabis businesses are forced to transport and safeguard large amounts of cash which is dangerous, and now a potential health-pandemic risk.

A summary of the SAFE Banking Act Provision in the HEROES Act states:
“This section would allow cannabis-related legitimate businesses, that in many states have remained open during the COVID-19 pandemic as essential services, along with their service providers, to access banking services and products, as well as insurance. This section also requires reports to Congress on access to financial services and barriers to marketplace entry for potential and existing minority-owned cannabis-related legitimate businesses.”

The House of Representative is expected to vote on the HEROES Act on Friday. However, it remains unknown whether the Senate will vote to approve the HEROES Act with the SAFE Banking Act of 2020 included.

For more information, please contact me at Our office remains fully operational to meet the needs of our clients during this unique time. 

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