Meet the CLIMB Act, a new bipartisan cannabis banking law

Walk over, SURE there’s a new cannabis bank bill in town.

On June 23, U.S. Representatives Troy A. Carter, Sr. (D-LA) and Guy Reschenthaler (R-PA) introduced the Capital Lending and Investment for Marijuana Businesses (CLIMB) Act.

If signed into law, the law would allow cannabis businesses access to a wide range of banking services, from lending to credit card services to money transfers. It would also allow the New York Stock Exchange, Nasdaq, and other national stock exchanges to list cannabis companies, giving them a new way to raise capital and grow.

The bill’s sponsors intend to provide targeted financial relief to small businesses and businesses run by veterans and members of disenfranchised communities.

“The CLIMB Act is critical because it provides American federal companies with traditional funding and support mechanisms for this burgeoning industry that other domestic industries are currently benefiting from,” said Saphira Galoob, executive director of the National Cannabis Roundtable, in a recent published press release.

“The more sources of funding available to cannabis companies, the better, especially for entrepreneurs, small businesses and minority-owned businesses who might otherwise have faced challenges accessing capital,” Galoob added.

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What does the CLIMB Act say?

The CLIMB Act would primarily give the cannabis industry access to a variety of “business help” opportunities from banking institutions. The term encompasses a wide range of activities: not just credit card services, but also money transfers, accounting services, and lending, to name a few.

“American cannabis companies are currently restricted from accessing traditional credit and financing, making it difficult to compete with larger, global competitors,” Rep. Reschenthaler said in the same press release.

“The CLIMB Act will remove these barriers to entry and give federally legal American cannabis companies, including small, minority and veteran businesses, access to the financial tools needed to thrive. This bipartisan legislation will boost the economy, create jobs and create a level playing field for American businesses,” he added.

At press time, none of the representatives could be reached for comment.

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The bill would also allow government agencies to offer grants and other sources of government funding to cannabis companies, with a focus on those hardest hit by the war on drugs.

Finally, the CLIMB Act would amend the Securities Exchange Act of 1934 to create a “safe haven” for national stock exchanges such as the NYSE and Nasdaq to list cannabis companies and allow stocks of those companies to be traded on the market.

Currently, cannabis companies can only be found on the Canadian Stock Exchange and traded through over-the-counter (OTC) markets that do not offer the security of a third party like a traditional exchange. Because a third party does not set a value for a particular stock in an OTC market, OTC stock prices are determined solely by buyers and sellers.

Business Insider reports that OTC markets are prone to fraud and criminal activity.

For now, the future of the CLIMB Act is as clear as month-old bong water. What passing the bill would mean for companies big and small, how it would work in line with the SAFE Banking Act, and whether it can even garner enough support to pass Congress remains to be seen.

Stay tuned for more updates on the CLIMB Act, the SAFE Banking Act and other federal cannabis reform laws on Leafly.

Max Savage Levenson

Max Savage Levenson probably has the lowest cannabis tolerance of any author on the cannabis beat. He also writes about music for Pitchfork, Bandcamp and other bespectacled people. He is the co-host of the Hash podcast. His dream interview is Tyler the Creator.

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