November 19, 2019

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SAFE Banking Act Passes House, Extends Cannabis Safe Harbor Protections

First introduced in 2013, the SAFE Banking Act passed the House 321-103 yesterday. This bill provides safe harbor to banks and financial institutions doing business with state-legal cannabis businesses, and allows cannabis businesses to move away from conducting business exclusively in cash.


Last night marked an exciting and promising development for cannabis advocates: the SAFE Banking Act passed the House of Representatives by a vote of 321-103.

The SAFE Banking Act, which was first introduced in 2013 and has been reintroduced in each Congress since, is industry advocates’ best opportunity to make meaningful policy change in the near term. The bill provides safe harbor to banks and financial institutions doing business with state-legal cannabis businesses, including medical and adult-use enterprises. Since marijuana is currently a Schedule I drug under the Controlled Substance Act, federally chartered banks do not currently work with the industry in order to avoid enforcement action by federal banking regulators. Some state-chartered banks and credit unions will work with state-legal businesses, but onerous reporting requirements make their services very expensive. Checking accounts commonly come with monthly fees of $5,000 or more. More to the point, Federal Reserve banks refuse to accept state-legal cannabis business deposits. The SAFE Banking Act extends safe harbor protections to the Fed. The bill also provides protections for ancillary businesses, including insurers, real estate firms, accountants and other professional services that may otherwise run afoul of federal anti-money laundering laws.

The current bill, introduced by Rep. Ed Perlmutter (D-Colo.), received its first true consideration earlier this year in a House Financial Services Committee hearing. A committee markup amended the bill and sent it to the floor for a vote of the full House. It passed “under suspension of the rules”—a House procedure typically reserved for non-controversial bills because it requires two-thirds of the body to pass instead of a simple majority. In July, the Senate Banking Committee convened a hearing to consider the merits of that body’s companion bill. It is unclear at this point if the Republican-controlled Senate will take up the House-passed bill, consider its own bill or do nothing on the topic.

The bill does not decriminalize or reschedule marijuana, nor does it include more ambitious restorative justice provisions found in many other pieces of pending federal cannabis legislation.

Cannabis businesses large and small are looking forward to moving away from conducting business exclusively in cash. The SAFE Banking Act would grant the cannabis business community access to many of the financial services most companies take for granted, like electronic payment processing, employer-sponsored 401(k) accounts and small business loans. Advocates, including state attorneys general and treasurers, argue that banking the industry will help identify the criminal actors, reduce crime associated with cash on the street and improve revenue collection.

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Robert J Cordy, Mcdermott, Criminal Attorney

Robert (Bob) J. Cordy focuses his practice on white collar criminal defense, internal investigations, appellate work and major public/private development projects.

Bob previously served as associate justice of the Massachusetts Supreme Judicial Court. He has worked with judges from Mexico, Russia, China, Kosovo, Turkey, Uzbekistan, Ukraine, Afghanistan and other countries on issues relating to judicial ethics, rule of law principles and the American judicial system. Bob also served as chair of the Supreme Judicial Court Rules Committee, co-chair...

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Marc E. Sorini Alcohol Distribution Attorney McDermott Will law firm

Marc E. Sorini is a partner in the law firm of McDermott Will & Emery LLP and is based in the Washington, D.C. office.  He heads the Firm’s Alcohol Regulatory & Distribution Group, where he focuses on regulatory and litigation issues facing the alcohol beverage industry and non-beverage alcohol users.

Marc's alcohol beverage practice covers licensing, labeling, advertising, trade practices, distribution, import-export, formulation and excise taxation.  He has represented alcohol beverage suppliers before federal and state courts, the Alcohol & Tobacco Tax & Trade Bureau (TTB), (formerly the Bureau of Alcohol, Tobacco & Firearms or ATF), the Federal Trade Commission (FTC) and state alcohol beverage control agencies, and he advises clients on compliance with the regulations and policies of TTB, FTC, the Food & Drug Administration and U.S. Customs and Border Protection (CBP).  Chambers USA ranks McDermott’s Alcohol Practice in its first tier and Marc is the only lawyer listed as a “Star Individual” in this field.  

His work also spans a number of traditional areas of legal practice that affect beverage companies, including the following:

  • Corporate, such as drafting and negotiating distribution and co-pack agreements and handling the alcohol regulatory and due diligence aspects of industry transactions
  • Food and beverage, such as counseling on product formulation matters and representing companies in potential product recall situations
  • Government affairs, such as testifying at legislative hearings, preparing legislative and regulatory proposals, and participating in rulemaking proceedings
  • Litigation, such as handling investigations by government alcohol regulatory authorities and representing companies in disputes with distributors
  • Intellectual property, such as reviewing and clearing advertising and labeling under alcohol beverage laws, voluntary industry codes, and false advertising principles
  • Tax, specifically federal and state excise tax matters

Marc has represented alcohol beverage suppliers before federal and state courts, the US Alcohol and Tobacco Tax and Trade Bureau (TTB, formerly the Bureau of Alcohol, Tobacco and Firearms, or ATF) and Federal Trade Commission (FTC) and state alcohol beverage control agencies. He advises clients on compliance with the regulations and policies of the TTB, FTC, Food and Drug Administration (FDA) and Customs and Border Protection (CBP). Marc also advises companies in the chemical, flavor and extract, energy, health care supply, soft drink and other industries on federal and state regulation of non-beverage alcohol. Marc often brings his in-depth knowledge to bear in legal projects involving many other practitioners, working with transactional deal teams from McDermott and other firms, litigation teams in commercial disputes or government investigations, subject matter specialists in food, agriculture, international trade and other areas, and a network of local lawyers and professionals skilled at handling the state and local zoning and licensing issues that arise in this industry.