July 6, 2020

Volume X, Number 188

July 06, 2020

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Senate Follows House Seeking to Make Cannabis Banking "S.A.F.E."

Sens. Jeff Merkley and Cory Gardner have reintroduced the Secure and Fair Enforcement (SAFE) Banking Act as a companion to House bill HR 1595. The Senate bill (SB 1152), initially introduced in 2017, similarly seeks to protect financial institutions from liability for federal prosecution that could arise from servicing cannabis-related businesses authorized under state law.

Interestingly, Treasury Secretary Steven Mnuchin, appointed by President Trump, supports the legislation for cannabis and banks working with cannabis businesses. He acknowledged federal regulators have no way to deal with the conflict created by state legalization of cannabis, which is in direct opposition to current federal law.

Speaking in support of the cannabis legislation in the present situation, Attorney General William Barr testified that unless there is a clear federal law prohibiting cannabis, he prefers the state approach and added he will not enforce the federal position on cannabis in those states in which it is legal.

The Senate bill, in its present state, goes slightly further than the House bill. The Senate version specifically blocks federal agencies from prohibiting, penalizing, or discouraging a depository from providing financial services to a "cannabis-related legitimate business or service provider or to a State, political subdivision of a State, or Indian Tribe that exercises jurisdiction over cannabis-related legitimate businesses." It also includes the insurance industry in its bill, which will allow insurance companies to provide coverage to a cannabis business.

While the Senate bill is not yet scheduled for a committee hearing, it will likely occur soon, given that the House version will come to the floor for a vote in a few weeks.

©2011-2020 Carlton Fields, P.A. National Law Review, Volume IX, Number 107


About this Author

Ilan A. Nieuchowicz Shareholder Carlton Fields Florida  Real Estate, Litigation

Ilan Nieuchowicz is a real estate and business trial lawyer. He represents large financial institutions, equipment loan and leasing companies, major real estate title insurance companies, real estate owners, investors, investment trusts, developers, property managers and management companies, owners and managers of medical and healthcare related real estate and hospitality related businesses.

As a former business broker and transaction attorney, Ilan has a uniquely practical perspective on business and real estate related matters. He has significant experience in real estate and...

Barry Leigh Weissman insurance lawyer Carlton Fields

With a legal career spanning more than four decades, Barry Leigh Weissman offers significant insurance and reinsurance industry experience. He represents insurance and reinsurance companies in regulatory proceedings, transactional matters, and dispute resolution including arbitrations, mediations, and litigation in state and federal courts. His clients have included national and international corporations, banking and financial institutions, and departments of insurance. On behalf of departments of insurance, his work has included regulatory matters such as Form A's, acting as liquidator and rehabilitator of troubled insurance companies, and representing commissioners who have been sued.

Merrick Gross commercial litigation lawyer Carlton Fields

Rick Gross has more than 30 years of legal experience serving a variety of business clients. His multifaceted commercial litigation practice includes aspects of banking, real estate, securities, business torts, and creditors’ rights, including bankruptcy. Rick litigates cases involving such claims in federal and state courts in Florida and throughout the United States. Rick also handles commercial loan workouts and foreclosures involving all types of real property including raw land, retail, office, multifamily, and condominiums throughout the country. 

Rick is a...