For the cannabis industry in general — and cannabis dispensaries in particular — cash recyclers have been problem solvers. While an increasing number of states allow residents to use small amounts of marijuana recreationally (18 states and counting, according to the National Conference of State Legislatures), it remains a Schedule I illegal substance, rendering it illegal in the eyes of the federal government. Subsequently, since banks are overseen by the Federal Deposit Insurance Corporation, they're barred from supplying checking accounts or providing loans to cannabis dispensaries. This fact makes cannabis a cash-only business. And as any cash-only business owner can attest, dealing only in cash renders them highly vulnerable to theft.
Thanks to cash recyclers, cannabis dispensaries have shored up their defenses. Whether it's an ATEC, Hyosung or other solution, the design, composition and functionality of cash recyclers make them highly tamper resistant and virtually impenetrable to external and internal threats. Beyond the efficiencies that cash recyclers provide to users — sorting, counting, counterfeit bill detection, monitoring, etc. — cash recyclers help keep cash safe and out of the wrong hands.
However, thanks to a piece of legislation that has the potential to become law, cannabis dispensaries may have another source of safety — and not just in name only.
What is the SAFE Banking Act?
Formally known as the Secure and Fair Enforcement Banking Act, the SAFE Banking Act is designed to remove the restrictions and penalties that disallow financial institutions from taking on cannabis dispensaries as clients. More specifically, according to the text of the legislation, the SAFE Banking Act aims to "increase public safety by ensuring access to financial services to cannabis-related legitimate businesses and service providers." In layman's terms, this bill would pave the way for dispensaries to leverage the traditional banking services that most businesses receive.
"More than 200 members of Congress have cosponsored the legislation."
If you've heard of the SAFE Banking Act; there's a good reason for it — it's been in discussion for several years now and was reintroduced by Representative Ed Perlmutter (D-CO) of Colorado in 2019. Since then, more than 200 other members of Congress have cosponsored the legislation and it's passed the House of Representatives no fewer than five times. It's also been referred to the Judiciary and Financial Services Committees.
However, it's within these smaller committees that the legislation has stalled. More recently, the SAFE Banking Act was approved by voice vote in the lower chamber of the House of Representatives as a supplement to the National Defense Authorization Act, Bloomberg reported. Thus, if the National Defense Authorization Act gets reauthorized by the U.S. Senate and signed by Pres. Joe Biden, the SAFE Banking Act becomes law of the land.
In September, when the voice vote occurred, Rep. Perlmutter said from the House floor that the SAFE Banking Act is about so much more than providing more convenience and simplicity to cannabis dispensaries.
"This is a public safety and national security matter, very germane to the issues at hand — dealing with foreign cartels and particularly the cash that is developed by this business that leads to crime," Perlmutter said at the time, according to Bloomberg.
Thus, if the SAFE Banking Act becomes law, cannabis dispensaries can take advantage of the banking resources that allow them to operate much more safely.
Will it pass?
Should this legislation be approved by the full Senate — a fate that will largely be determined by the Committee on Banking, Housing and Urban Affairs, where the bill currently resides — Pres. Biden is expected to sign the bill. But there remains some uncertainty as to whether it will ever reach the president's desk.
"Several senators want the SAFE Banking Act to be one piece of a much larger cannabis reform bill."
Saphira Galoob, who serves as CEO for the cannabis lobbying firm The Liaison Group, told Bloomberg that just because the SAFE Banking Act allows banks to work with cannabis dispensaries doesn't mean that they're required to.
"Loans will be feasible, but it will be a bank-by-bank decision," Galoob said.
Additionally, several senators want the SAFE Banking Act to be just one piece of a much larger cannabis reform bill. As the National Review points out, Senate Majority Leader Chuck Schumer (D-NY) wants it to be part of the Cannabis Administration and Opportunity Act, while Senator Sherrod Brown (D-OH) says the SAFE Banking Act doesn't go far enough. Brown has indicated he supports the measure, but not in its current form.
In other words, it could be quite a while before it reaches the White House — assuming it gets there. If you own a cannabis dispensary, a cash recycler is your best bet to cash security, efficiency and ease of usage. For cash handling, sorting, storing and control, BranchServ Convergint/CustomVault Convergint has the cash recycling solutions that more banks and businesses trust. For more information and to arrange a demonstration, contact BranchServ Convergint today.