Senate Finally Addresses Banking Reform For Billion-Dollar Cannabis Industry, What Took So Long?

Anxiety is running high in the cannabis industry as the Senate Banking Committee gets ready to discuss the Secure and Fair Enforcement (SAFE) Banking Act, which seeks to normalize relations between state-licensed cannabis businesses and financial institutions. 

Most everyone is acutely aware that without a solution to the lack of access to banking, the billion-dollar cannabis industry will continue to flounder in a state of stressful chaos, which operating in a cash-only system tends to produce. 

What A Way To Treat A Billion-Dollar Industry: National Shunning

With cannabis legal in some form in nearly every state in the union, barely 10 percent of all banks and some 4% of all credit unions provide services to cannabis-related companies.

The national shunning of this huge industry is due to the absurdity of the Controlled Substances Act that has cannabis classified as a Schedule I drug. Therefore, any banking institution that would dare to touch the industry’s money would be deemed a money launderer by federal law. 

So, classified as outlaws, is it any wonder that some players of the industry continue to behave that way. Keeping the doors closed to banking and financial institutions is keeping the doors open to an unregulated, underground marketplace. Those thousands of legal weed shops across the country that are forced to operate in cash are constantly vulnerable to robberies, some of which have ended in violence. 

“Every day that Congress fails to act endangers the livelihood of these small businesses and their consumers, puts local regulators and law enforcement at a disadvantage and facilitates the activities of unlicensed operators and criminal organizations,” wrote Paul Armentano, deputy director of NORML in an Op-Ep published by The Hill.com. 

What Say You Multistate Operators?

Troy Datcher, CEO of The Parent Company GRAMF is encouraged that the hearing is even happening. Who can blame him?

“It has been nearly 4 years since this bill first passed the House of Representatives, with wide bipartisan support. In the years since, the SAFE Banking Act has passed the House on a strong bipartisan basis 7 more times, only for the Senate to fail to take up the bill each time,” Datcher said. “This time must be different.” Amen to that.

Datcher pointed out that the tens of thousands of state-licensed and ancillary cannabis businesses across the U.S. employ more than 400,000 Americans. That's a lot of jobs.

Matt Darin, CEO of Curaleaf CURLF says banking prohibitions are bad for the health and safety of all involved, from communities, law enforcement, cannabis workers and business owners. Though he too seems especially irked that the ongoing bank shunning has emboldened the illicit market.

“Our industry’s greatest obstacle is the emboldened illicit market in states where adult-use cannabis has already been legalized but policymakers are falling behind and undermining the value of the very licenses they created,” Darin said.

Another Benzinga friend, Jim Cacioppo, CEO, chairman and founder of Jushi Holdings Inc. JUSHF is practically begging Congress not to squander another opportunity to help safeguard Americans and support smart economic policies that contribute to the nation’s financial health, which really is not such a big ask.

Having said that, Caccioppo also sounded a bit annoyed at the unfairness. Again, who can blame him?
“Cannabis businesses have continued to pay more than their fair share of state, federal, Social Security and Medicare taxes, and it’s time we stop discriminating against the industry and those who work in the sector,” he said. “By passing the SAFE Banking Act, our federal lawmakers have an incredible opportunity to stand on the right side of history – all they need to do is act on this important bipartisan measure.”

So, get the coffee pot on and tune in. The hearing on the banking bill will be streamed live online Thursday, May 11, at 9:45am.