On Wednesday, the U.S. House of Representatives Financial Services Committee passed legislation designed to protect banking and insurance firms from federal penalties if they provide financial services to cannabis-related businesses legalized at the state level.

Under current federal law, the cultivation, possession and distribution of marijuana is illegal, except for some limited research purposes. However, at the state level, all but four states permit medical marijuana use in some capacity, and several states now allow the sale of marijuana for recreational purposes.

H.R. 1595, the “SAFE Banking Act of 2019” by Reps. Ed Perlmutter (D-Colorado), Denny Heck (D-Washington) and Steve Stivers (R-Ohio), attempts to deal with this federal-state conflict and would provide safe harbor to insurers, agents and brokers, as well as much-needed clarity for transactions involving cannabis-related legitimate businesses. The legislation would prevent criminal prosecution and civil liability of agents and brokers who choose to engage in the business of insurance with cannabis-related legitimate businesses.

The Big “I,” along with its industry partners, worked hard to include the insurance protections and is pleased with this step toward legal clarity for agents and brokers. A group of insurance trade associations sent a letter to Reps. Perlmutter and Stivers thanking them for their work to include the business of insurance in the safe harbor provisions of this legislation.

The legislation now awaits consideration by the full House. The Big “I” will continue to work on other legislative efforts to ensure legal protections for agents and brokers.

Joseph Cortina is Big “I” director of federal government affairs.