Cannabis Banking Bill Likely to Pass Senate in 2022 as Democrats Align

Legislation permitting banks to lend to cannabis companies may finally cross the finish line this year as Senate Democrats align with their House counterparts.

The Secure and Fair Enforcement, or SAFE, Banking Act says federal banking regulators cannot penalize depository institutions for providing banking services to cannabis-related businesses. Championed by Rep. Ed Perlmutter, D-Colo., the House of Representatives has passed the measure six times, most recently in February 2022, before seeing it stall out in the Senate the previous five times.

Banks are lobbying for the legislation as they seek to lend to an industry that is experiencing explosive growth. The U.S. marijuana market is the world's largest, generating over $25 billion in regulated sales in 2021 — a figure expected to reach $40.5 billion by 2025, according to cannabis research firm New Frontier Data.

The bill is likely to benefit from a final push by Perlmutter, who announced in January that he is retiring at the end of the year.

"The bill's biggest champion is leaving at the end of the year," said Daniel Stipano, a former top attorney with the Office of the Comptroller of the Currency and now a partner with Davis Polk. "He will work really hard to get this through."

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