Banking reform bill in Congress could help legal pot industry

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A key part of being happy in life is managing expectations, and investors and companies who waited years to see cannabis federally legalized have become experts in the effort.

On April 21 New Jersey became the 18th state to allow the sale of recreational cannabis.

The bliss for the cannabis industry in this paradigm is another state allowing some of the major multi-state operators to obtain one of the limited numbers of licenses on offer.

But the industry faces an even bigger problem than state licenses: Current laws in the United States make accessing funds to start or grow a cannabis business nearly impossible.

The government can still punish banks for financing drug-related operations, even in states where recreational and medical cannabis is legal. Thus, most banks will not do business with cannabis companies.

Many pot operations are therefore forced to operate as cash businesses, which then makes them targets for robberies. In Washington state alone, at least 80 armed robberies in clinics have been reported so far this year.

Governor Jay Inslee weighed in on Twitter, calling on Congress to pass the SAFE Banking Act, which would prohibit a federal banking regulator from penalizing a bank for providing services to a legitimate cannabis-related business.

Washington Senator Murray leads the charge

Politicians in Washington, DC are beginning to take notice.

On Wednesday, which happened to be the 4/20 International Pot Party, Sen. Patty Murray (D-Washington), the third highest ranked Democrat in the Senate, told a press conference that she was committed to passing the SAFE Banking Act, formally on the Safety Act and equity banking.

“It makes no sense that legal cannabis businesses are forced to operate entirely in cash,” she said. “It’s dangerous – and sometimes even deadly – for the employees behind the registry, but it’s also completely preventable.

“I was pushing the federal government — especially my fellow Republicans — to catch up with Washington State. I am working to update our laws so that these small legal businesses have a safe way to do business.

“I urge each of my colleagues to come together so that we can finally pass the Safe Banks Act. »

Under existing laws, regulators can penalize banks by terminating or limiting their deposit insurance or, for credit unions, their sharing insurance.

Under current law, banks could also be forced to confiscate assets if they provide a loan or other financial services to a legitimate cannabis business. The SAFE Banking Act would eliminate this threat.

Industry (still) cautiously optimistic

Senator Murray’s press conference this week was expected to be a welcome event for industry executives and employees who expressed optimism that the bill could become law under the government-controlled Congress and White House. Democratic Party. (Skeptics will say, with good reason, that narrow Democratic majorities in both houses of Congress make federal legalization unlikely anytime soon.)

But the SAFE Banking Act has existed in multiple forms since at least 2013, with little or no movement regardless of which party holds the reins of government.

Earlier this year, the House of Representatives passed the America Competes Act, which included the provisions of the SAFE Banking Act.

It was the sixth time the House has advanced the Safe Banks Act in the Senate. And for the sixth time, the Senate voted against the bill.

“Legalization is long overdue”, Curaleaf (CURVE) General manager Joseph Bayern told TheStreet in a recent interview.

“It is time for lawmakers to act, and it has taken far too long. I think we are optimistic about achieving something this year.

[”Sen. Chuck Schumer {D-New York)] postponing the bill to August is not a good factor. Everyone recognizes that [the Senate is] far behind the American public.

Meanwhile, Boris Jordan, Executive Chairman of Curaleaf, is also cautiously optimistic about banking reform, the industry desperately needs.

“We heard that one of the most powerful senators involved in the original law – I will not mention it because I was told I was not allowed to do – that was involved in the original law began to convene committees and started talking to sAFE instead of the broader law, “Jordan said in the last call of income from his business.

“We believe this is an evolution very, very positive.”

The American people want the country to move towards legalization – a recent Gallup poll showed that more than two-thirds (68%) of Americans want the country to move towards legalizing cannabis.

The ball is in Congress’s court.

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This story was originally published April 21, 2022 3:53 p.m..

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