The successful passage of the Secure and Fair Enforcement (SAFE) Banking Act in the US House of Representatives signals a coming game change in the global legal cannabis market.
Members voted a whopping 321 to 103 in favour of HR 1595: SAFE Banking Act with nearly unanimous support from Democrats, as well as about half of all Republicans.
“…The [Caribbean] region is riddled with very complex policy, legal, regulatory, social, international and political dynamics including the big elephant in the room, the lack of banking access…”— Delano Seiveright, Director of the Cannabis Licensing Authority (CLA) in Jamaica
The SAFE Banking Act seeks to amend US federal law so that banks and other financial institutions can work directly with state-legal cannabis businesses.
Director of Jamaica’s Cannabis Licensing Authority (CLA) Delano Seiveright noted that while it is still early days, as the act will have to be brought to the US Senate, the fact that it’s at such advanced stages is significant.
“It really is a huge development as the issue of lack of access to banking for legal cannabis businesses represents a juggernaut for many in the legal industry globally,” he began.
“Particularly in Jamaica, where our legal cannabis industry is literally being stifled. [There is] limiting growth of the sector, downpressing job creation and restricting agricultural development and consequently inhibiting the development of rural communities,” Seiveright added.
Seiveright made the comments prior to the start of CanEx Jamaica Business Conference & Expo being held at the Montego Bay Convention Centre in September.
CanEx Jamaica 2019, which featured a range of international and local speakers including former President of Mexico, Vicente Fox; prominent United Kingdom ruling Conservative Member of Parliament, Crispin Blunt; as well as founder of the largest legal cannabis company in the world, Bruce Linton and US basketball celebrity champion John Sally.
The vote in the US House of Representatives represents the first time ever that a supermajority voted affirmatively to recognise that the legalisation and regulation of cannabis is far better than a public policy of prohibition and criminalisation.
The bill clarifies that proceeds from legitimate cannabis businesses would not be considered illegal, and directs federal regulators to write up rules for how they would supervise such banking activity.
American banks have thrown their weight behind the legislation, as they press for clarity on whether they can do business with cannabis companies where it is legal at the state level despite the fact that marijuana remains illegal in the eyes of the federal government.
Seiveright, who also doubles as Senior Advisor/Strategist for Tourism and Board Director of JAMPRO, Jamaica’s Trade and Investment Agency, noted that Jamaica remains at the forefront of the region on cannabis policy and reform.
He noted that, “It was around 2016 that the board of CLA started taking applications, thereafter granting the first set of licenses in late 2017. Now we have 55 licenses granted spanning cultivator, retail, processing and research and development.”
“No other country in the region has achieved this much and the Prime Minister Andrew Holness-led government deserves commendation for their efforts in a space that seriously lacks resources and is riddled with very complex policy, legal, regulatory, social, international and political dynamics including the big elephant in the room, the lack of banking access,” Seiveright continued.
Thirty-three US states allow for some form of legal cannabis use, but banks have by and large, like Jamaica, have been unwilling to do business with companies that sell marijuana or related enterprises, out of concern they could run afoul of federal laws.
That has left companies in the cannabis industry with extremely limited options, including relying on just a handful of small financial institutions or strictly doing business in cash.