Walking around with loads of hard-earned cash to deposit from a successful business isn’t ideal, but it’s common in the cannabis retail industry. And high amounts generally raise flags at most financial institutions for questions about legitimacy. The cause is that many retailers and owners have trouble maintaining their business bank accounts or have limited privileges. To address this issue, a Congressional sub-committee held a hearing last week on February 13th.
4 Representatives (from Colorado, Washington, and Ohio) created a draft titled the Secure and Fair Enforcement Banking Act of 2019 (SAFE Banking Act). The main purpose of the proposal is to harmonize state and federal laws on cannabis business activity and provide businesses access to necessary banking services. It benefits the banks as well, protecting them from persecution or investigation for merely accepting deposits from these businesses (when they’re state-authorized, of course).
The disagreements between federal and state laws, especially the Controlled Substances Act, causes the most difficulties across the board among proprietors, banks, and investors. Now that the vast majority of the entire country has state laws, at least on a medical level, it’s far beyond the time to avoid any unnecessary accusations of suspicious activity, preventing banks that want to help these businesses flourish, and certainly time to direct federal investigations to real criminal activity.
In the states where the retail economies are significantly flourishing on the Pacific and in Colorado, it’s not just the shops themselves that are facing these issues. All ancillary businesses can get tied up in bank problems for their involvement, even without directly handling THC products. It’s absurd, but currently it’s happening. Fortunately, the SAFE Banking Act acknowledges this and will protect them as well if Congress approves this proposal.
Another excellent and commonly overlooked aspect of the SAFE Banking Act is it would specify how businesses on tribal land could qualify. It would be a great way for this consistently growing and versatile industry to help this country’s longest standing populations; obviously the more people that can be involved in an industry, the better the products will become according to everyone’s wants and needs.
Now that the hearing has transpired, here is what we know so far:
Rep. Blaine Luetkemeyer (Republican, Missouri) considers this piece of legislation as “putting the cart before the horse” while federal laws still prohibit THC. Overall an unfortunate, albeit predictable, perspective.
California Treasurer Fiona Ma called the SAFE Banking Act a critical step for the rapidly expanding industry. Couldn’t agree more.
This proposal is far from being unique, along with countless other drafted bills surrounding cannabis legality for personal use and private business. For close to a century, hemp and cannabis products have been scrutinized and sat at the center of many debates in courtrooms, households, and public protests. Now, however, many of the most important battles have been won in a majority of the land here, so we can be optimistic about a hasty agreement that will benefit businesses, banks, and consumers equally in the near future instead of another hundred years.