If approved by the U.S. Senate, the bill would make it easier for shops to borrow money and take credit card payments.

When Phil Smith and Jenny Roseman first started their cannabis delivery business Freshly Baked, they struggled to scrounge together enough money to begin operations.

Since their business isn’t federally recognized, only a handful of banks would do business with them — a challenge that every new cannabis business must endure.

“We had to bootstrap this thing. Jenny and I went kitchen table to kitchen table to raise the money we did,” Smith said. “It would have been nice to just go get a business loan like a normal company.”

The Secure and Fair Enforcement or SAFE Banking Act, which passed through Congress in April 2021 and is waiting for a vote in The Senate, would address this exact issue.


The way things are now, interstate banks — banks that operate on a nationwide level — are prohibited from working with cannabis companies due to the fact that the drug is federally illegal.

Banks that work with these shops can receive heavy fines and penalties, so many banks avoid providing loans or handling finances for these newly forming companies. 

“Sometimes I feel like I’m working in the previous century,” said Nicole Campbell, owner of The Green Lady Dispensary located on Nantucket Island, where there are a very small number of banks in the first place.


Due to the limited number of banks that these shops can finance with, the door for sketchy and predatory behavior is wide open — offering incoming shop owners a backdoor solution for raising money to start up their businesses. New shop owners will have a much easier time opening their stores compared to when current shop owners were starting their businesses.

“It is very difficult for emerging businesses to secure capital investment during the license application process in the absence of traditional lending structures,” says MassCann President Grant Smith, a longtime cannabis activist in Massachusetts. [That] opens the door to predatory behavior by private vulture capitalists.”


The SAFE Banking Act will remove those penalties, and federal banks, credit card companies, and other financial corporations will be able to get involved in the cannabis industry, removing the power for financial predators that aim to take advantage of these struggling small businesses.

Campbell works with Bay Coast Bank for her store The Green Lady Dispensary. She and her husband financed their business entirely on their own, with no outside investors, and Campbell said she’s glad they found a bank on Nantucket Island that is comfortable working with them.

“It was really, really difficult,” she said.


As more banks start doing business in the industry, it’ll be easier for independent, family-owned businesses like Campbell’s to join the competition, leading to lower prices, as well as a less complicated payment process, according to experts.

National credit card companies like Visa and Mastercard are also penalized if customers use their services at a cannabis shop. Therefore, dispensaries can only accept cash or debit payments. When customers make a purchase, they have to pay as if they’re using an ATM.

At times, Campbell said they can’t even give change when people pay with cash. When tourists from out of state come into Campbell’s store, she said many times they aren’t aware of these rules, so they aren’t able to pay for their products. 


The SAFE Banking Act will allow these major credit card companies to provide services for cannabis customers, making paying for cannabis purchases significantly more convenient. Customers could even pay via payment apps like Venmo and CashApp. Meanwhile, shop owners won’t have to handle as much cash.

However, this bill only offers a small win for current shop owners within the Massachusetts cannabis industry. According to Cannabis Control Commission Chairman Steve Hoffman, there are already several local banks that provide services to local cannabis shops, so there won’t be a dramatic change here if the bill comes to fruition.

In addition, Massachusetts and the Cannabis Control Commission place a strong emphasis on social equity and confronting racial inequalities within the local cannabis industry. Social equity programs were written into the cannabis legalization laws back in 2016.

Many cannabis officials and activists criticize the SAFE Banking Act for not addressing these racial inequalities. Since social equity is the main priority within the Massachusetts industry, the real-world impacts of the bill fall short of this vision.

“If you are not intentional about equity, it won’t happen,” said Smith of MassCann. “If the bill is implemented correctly, in particular with some kind of equity structure at the center of it, it will lead to more competition in the market, lower prices and it will lead to the revitalization of communities that suffered for so long.”

Some local cannabis store owners, like Pure Oasis co-owner Kobie Evans, said they are somewhat unphased by the bill’s impacts.

While the bill will make operations more convenient for shop owners, they would much rather see federal legalization of the drug, promotion of social equity, and reversing impacts brought by the War on Drugs. The bill doesn’t add much to that effort, so they’ll nod their heads and continue “fighting the good fight,” as Evan said.

Evans also said that he feels the SAFE Banking Act is meant for big, wealthy corporations in the industry rather than small, family-owned shops.

Those fighting for federal legalization have fewer resources than the wealthy corporations pushing for the SAFE Banking Act, which is why this bill is hitting Congress prior to a legalization bill, according to experts.

“If you are Bank of America you have more money to pay for a lobbyist,” Evans said.

Regardless, the smaller shops will receive some benefits if the bill passes, especially those trying to break into the industry.

“Just because the bill doesn’t accomplish everything we need, that isn’t a reason to oppose it,” Hoffman said.