Cannabis and banks in US are two actors in the economy that have not been able to work together because of obsolete and hypocritical legislation
Cannabis and banks in US have been two concepts that have never been able to go in the same sentence since more than two decades ago the marijuana industry took off in the United States, generating wealth worth billions of dollars. Since cannabis is an illegal substance at the federal level companies in this sector could not have access to the banking services that any normal citizen and many citizens of few scruples have.
But last Wednesday the House of Representatives voted to pass the Safe Banking Law (SAFE), a federal bill that would provide the state’s legal cannabis industry with comprehensive access to banks and their financial services. The bill has been a historic advance towards the normalization of the marijuana industry in the United States. Customers of cannabis dispensaries and retail stores will be able to purchase any legal product related to cannabis by credit or debit card.
The debate to allow the cannabis industry to finally have access to banking services was a total success as 321 congressmen voted in favor and 103 against. Earl Blumenaur (D-OR), expressed his joy at the repair of this historic grievance against the cannabis industry. This Oregon congressman said the new law was something that states that have legalized cannabis had been waiting for a long time. “This is an industry of 11 billion dollars and continues growing”, he told the media. The new law was necessary because people and states were demanding it for too many years.
For his part, Ed Perlmutter, a Republican congressman from Colorado, said the most accurate words about the new SAFE law. Perlmutter, the main promoter of the bill, sayd it is a matter of public safety and state rights. Thanks to the new law, honest entrepreneurs can avoid working with cash. Under current federal law, banks that provide services to cannabis industry can be prosecuted.
Michael Correia, director of government relations for the National Association of the Cannabis Industry, says that if banks do business with the cannabis industry they can be accused of acting against money laundering laws and federal punishment can be very hard. You can even be stripped of your FDIC deposit insurance. Although the cannabis industry has received some help from local banks and credit unions, it still does not have access to national banks.
$ 15,000 million in cannabis sales in 2019
New regulations for the cannabis industry in the US
Wall Street banks have more risks of being prosecuted for federal crime. The Safe Banking Law (SAFE) will remove the cannabis industry from the financial ostracism in which it has been immersed for more than two decades. The new law cannot change the legal status of marijuana at the federal level but it does prohibit the federal government to prosecute banks for treating state-owned cannabis companies like any other legal business.
The approval of the SAFE Banking Law is a historic milestone since for the first time Congress acts to protect the legal recreational marijuana industry of each state. The federal way of thinking begins to change and Congress begins to take significant steps. The SAFE banking law is backed by many Republicans and Democrats. The size of the legal marijuana market will grow to 30 billion dollars in 2025, an amount that banks cannot ignore.
Actually it is already impossible for banks not to get involved in the cannabis industry. R.J. Lehmann explains it with a very realistic and recurring example. If an electrician or mason who works for a marijuana dispensary asks for a mortgage, there is already a link between the bank and the dispensary.
Leading cannabis activists are not completely happy with the Banking Law. The ACLU, the Drug Policy Alliance and Human Rights Watch, and other activists wrote a letter to the House representatives a week ago in which they regretted that the banking bill does not address the reform of marijuana in a comprehensive manner and serves primarily to benefit the marijuana industry but not the communities that have suffered the worst part of the ban and the war on drugs. But this equity problem has nothing to do with cannabis and banks in the US.
As it was easy to imagine, the prohibitionists did not like the approval of the House of Banking Law SAFE. The prohibitionists believe that bank access for the marijuana industry will help it exploit communities of color and low income.
Abu Edwards, Director of State Affairs of SAM Action, warns of the recent outbreak of lung diseases from cannabis vaping in the US. and the dangers of marijuana with too much THC. Edwards believes that any expansion and promotion of the increased use of marijuana is wrong is a mistake.
These words attract attention because they question a legal industry that honestly generates wealth and jobs in a world in which the big drug dealers, human organ dealers, terrorists, human traffickers and in general the worst of the humanity drink coffee in the offices of the directors of the most important banks in the world. It is hypocrisy without limits. These unscrupulous people are respectable citizens in the eyes of the banking system. However, cannabis and banks in US still can’t sit at the same table.
Now that the House has passed the SAFE Banking Law, the project will go to the Senate. But will it be approved by the Senate? We hope so, but unfortunately the final destination of the SAFE banking bill in the Senate is uncertain.
