A new attempt to pass legislation that would pave the way for full-scale banking support of the cannabis industry just received a big-name backer.
PayPal Inc. has reportedly started lobbying for passage of the SAFE Banking Act.
So far, this bill has been making headway with lawmakers. And, as evidenced by PayPal’s new decision, the bill is also picking up a lot of support from key players in the financial sector.
PayPal Backing the SAFE Banking Act
According to the website of Colorado Congressperson Ed Perlmutter, PayPal added cannabis banking to its lobbying report for the first quarter of 2019.
This could be significant because it means that PayPal is likely to begin supporting the SAFE Banking Act. And because that support is showing up in the company’s quarterly lobbying report, it is probable that PayPal will be putting its money where its mouth is.
With PayPal now on board, the SAFE Banking Act continues attracting support from important players in the financial industry. In fact, there are now more than 20 groups registered to lobby to get the SAFE Banking Act passed into law.
As per Perlmutter’s website, the list of lobbying groups includes multiple cannabis industry, advocacy groups.
But support for the bill also extends beyond cannabis organizations. Specifically, a number of labor unions, state credit unions in California, Michigan, New York, and Pennsylvania, as well as The American Bankers Association are all reportedly backing the bill.
In many ways, it is not surprising that so many financial organizations are supporting the SAFE Banking Act. That’s because the cannabis industry is already becoming a massive sector—and it’s poised for even more explosive growth.
In fact, projections from financial experts at the beginning of the year said that legal cannabis is on pace to become an $80 billion industry by 2030.
Given those projections, the legal cannabis industry offers the financial sector some big opportunities.
Cannabis Industry’s Banking Problems
The SAFE Banking Act is designed to address the cannabis industry’s ongoing banking problems.
Essentially, these problems arise from the fact that cannabis is illegal at the federal level. Because of weed’s federal status, large financial institutions have been very hesitant to get involved with the industry.
But the SAFE Banking Act would change many rules and regulations. These changes would allow banks and other financial companies to work with cannabis companies.
Specifically, the SAFE Banking Act would protect banks and credit unions that work with marijuana companies.
It would also ensure that new banks won’t be denied charters, deposit insurance, and other important tools if they want to work with the cannabis industry.
Recently, lawmakers have suggested amendments. Many are aimed at ensuring diversity and equity among banks working with cannabis companies.
The bill is championed by a bipartisan group of 22 senators. And in the House, it reportedly has 162 co-sponsors.
The bill cleared the House Financial Services Committee in March. Now, experts predict the bill to pass the House. And this could put pressure on the Senate to take decisive action.