Coronavirus and SAFE Transactions
Earlier this week, Democrats in the House of Representatives unveiled the Helping Emergency Responders Overcome Emergency Situations Act, or HEROS Act, their proposed follow-up to the CARES Act that provided a range of financial relief to individuals and businesses coping with the harsh realities of the COVID-19 crisis. In one of the most significant legislative developments to date for cannabis legalization at the federal level to date, the substance of the SAFE Banking Act is included in the original HEROS Act bill text.
The SAFE Banking Act would provide legal protections to banks, insurance companies, and other financial institutions such that they can serve state-legal cannabis businesses without fear of federal enforcement actions against them under the Controlled Substances Act and federal money laundering statutes. The bill has previously passed through the House as a standalone bill, only to be held up in committee upon arrival in the Senate. Its inclusion in larger priority legislation through the HEROS Act potentially increases the likelihood that it will become law, though Congressional Republicans have already seized on the inclusion of SAFE Banking and expanded cannabis research to attack the HEROS Act.
The inclusion of SAFE Banking in the HEROS Act makes a tremendous amount of sense. The deadly Coronavirus has struck the U.S. and forced Americans to isolate themselves. Many businesses have had to close their doors and essential businesses function in a dangerous environment. Every transaction runs the risk of transmission; especially when the transaction requires the customer to hand cash to a cashier. And many cannabis businesses today are forced to conduct every transaction in cash due to the dearth of financial institutions willing to risk the potential repercussions of working with the industry. The SAFE Banking Act would radically shift these dynamics almost instantaneously.
It is worth noting that the risks caused by cash transactions are more acute in the cannabis industry, due to outsized number of consumers in vulnerable populations that the industry serves. Indeed, many states have declared cannabis stores to be essential businesses in significant part because patients suffering from cancer, AIDS, or other conditions, cannot get by without their medicine. When these patients must purchase their medicine with cash as the medium, they are putting themselves at unnecessary risk.
In a time when coronavirus is spreading rapidly and obsessive hand washing and surface cleaning are stressed constantly, coins and dollars may prove tantamount to modern-day smallpox blankets. China has even taken measures destroy and/or quarantine their cash to prevent the spread of the Coronavirus. Yet cannabis patients remain largely forced to exchange potentially-contaminated currency in order to obtain their medicine. There is now cause for hope that this may soon change. Stay tuned.