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Posted On: 06/09/2020 11:00:24 AM
Post# of 4861
I have written before about the importance of banking reform for the cannabis industry, and I maintain that nothing has changed since the first time I posted about this topic. Sure, some companies are barreling ahead with selling product on line and in shops without this reform, but they are opening themselves to possible federal prosecution when they do so. For those expecting everything to flow freely once medicare is approved, I have a word of caution.
The SAFE Banking Act will allow banks and other financial institutions to work with state-legal cannabis companies without fear of federal reprimand. The SAFE Banking Act passed the House in September 2019, but remains stalled in the Senate.
Ever since the beginnings of legal cannabis in 1996, this has been a cash-only industry. That’s due to outdated federal banking laws that were intended to curb money laundering by illegal drug cartels. Those laws didn’t foresee the coming of state-legal cannabis, so a grower or retailer licensed by a legal state today is still seen as an illegal drug runner within the context of federal banking laws.
As a consequence, customers can’t use credit cards or debit cards at most legal stores. Many cannabis companies have had their accounts closed without notice. Some workers in the industry can’t even get personal home or car loans.
In some states, smaller banks and credit unions do offer simple deposit accounts for state-licensed cannabis companies. But those accounts come with extremely burdensome documentation requirements, and are expensive to maintain as a result.
In my opinion, banking reform is still needed for full scale operation in this industry and for any company operating within this industry.
Kgem
The SAFE Banking Act will allow banks and other financial institutions to work with state-legal cannabis companies without fear of federal reprimand. The SAFE Banking Act passed the House in September 2019, but remains stalled in the Senate.
Ever since the beginnings of legal cannabis in 1996, this has been a cash-only industry. That’s due to outdated federal banking laws that were intended to curb money laundering by illegal drug cartels. Those laws didn’t foresee the coming of state-legal cannabis, so a grower or retailer licensed by a legal state today is still seen as an illegal drug runner within the context of federal banking laws.
As a consequence, customers can’t use credit cards or debit cards at most legal stores. Many cannabis companies have had their accounts closed without notice. Some workers in the industry can’t even get personal home or car loans.
In some states, smaller banks and credit unions do offer simple deposit accounts for state-licensed cannabis companies. But those accounts come with extremely burdensome documentation requirements, and are expensive to maintain as a result.
In my opinion, banking reform is still needed for full scale operation in this industry and for any company operating within this industry.
Kgem
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