Safety in Numbers

U.S. Legal sales and the Safe Banking vote

By Noah Tomares, Senior Research Analyst, New Frontier Data

Before Halloween, Thanksgiving, and Christmas fill the remainder of our year with fear and cheer, we at New Frontier Data would like to take a moment to focus on another, more recent tradition: Congressional consideration of SAFE Banking.

A version of The Secure and Fair Enforcement (SAFE) Banking Act has been introduced in every Congress since 2013. The early drafts of SAFE Banking, if passed, would introduce three important changes to the way that financial institutions are allowed to interact with the cannabis industry.

  1. It would prevent the Federal Deposit Insurance Corporation (FDIC) from threatening and/or withholding coverage from a financial institution that offers its services to a licensed cannabis business in compliance with its state’s regulations.
  2. Banks depositing proceeds from state-licensed cannabis sales would not be considered money laundering under federal law.
  3. Bank assets would not be seized for offering loans to licensed, legal cannabis companies.

Without SAFE Banking, and access to financial institutions, legal cannabis dispensaries are essentially forced to transact primarily in cash. With New Frontier Data currently projecting $32B in sales in 2023, having so much currency on hand puts these locations at higher risk of robbery and necessitates additional security to protect both the retail location and their revenue.

In 2019, additional language was incorporated to protect insurers who provide coverage to licensed cannabis companies. This was also the first time SAFE Banking passed in the House of Representatives. The SAFE Banking Act would pass the House 6 more times (a total of 7) by July 2022; it never passed in the Senate.

Now, in 2023, the revised SAFER Banking Act is working its way through the upper chamber. The bill was recently amended in committee and Senate Majority Leader Chuck Schumer has committed to bring it to the floor “very soon.”

While Congressional approval is always fraught with contention, the American people are much more unified. According to New Frontier Data’s latest consumer survey, 64% of Americans (and 89% of cannabis consumers) believe cannabis should be legalized/decriminalized. Most consumers (73%) and half of nonconsumers (50%) also agree that legal cannabis is safer than illegal cannabis.

Whether the Senate-led effort to introduce banking protections succeeds or not remains to be seen, but in the 10 years since SAFE Banking was originally introduced, the cannabis industry has experienced tremendous growth. 23 states + D.C have legalized Adult-Use of cannabis, and another 16 states have legalized Medical-Use only. 246 million Americans have access to high-THC legal cannabis in some form. More than half of U.S. adults have either consumed cannabis or are interested in trying it. For more information on the growing variety of cannabis consumers, check our out latest in our series of cannabis consumer reports: Cannabis Consumers in America 2023 Part 2: Exploring the Archetypes.