Whether for or against legalizing marijuana, most American voters agree cannabis companies should have access to banks

Most US voters think cannabis companies should have access to legal banking services, so why aren’t they available yet?

Legal cannabis companies still face the ridiculous struggles of operating with cash. This has serious implications, especially when it comes to safety and security not only for pharmacies but also for their employees and the public.

It all boils down to marijuana’s federal status: Because it’s still a Schedule 1 substance, banks will continue to refuse to work with dispensaries and other cannabis companies, making them unable to allow customers to pay by credit card enable. Consumers are constantly looking for ways to pay by credit card, but it’s not the pharmacies’ fault if they can’t. Federally regulated banks simply cannot work with companies that deal with Schedule 1 substances.

In fact, a new poll shows that most voters already think cannabis banking reform should happen by now. The poll, conducted by the Independent Community Bankers of America (ICBA), found that 71% of US voters support allowing cannabis companies to access banking services in states where it is legal.

ICBA was the first national banking group to ever endorse the SAFE Banking Act, and also testified before Congress that it helped pass the bill.

“US voters have made it clear that the current law preventing cannabis-related businesses from accessing the banking system is having a negative impact on local communities,” said Rebeca Romero Rainey, ICBA CEO and President. “With U.S. voters overwhelmingly in favor of allowing cannabis-related businesses access to the banking system, the Senate should act now on the bipartisan cannabis-banking legislation that the House of Representatives has passed seven times,” she says .

The poll also found that over 80% of voters acknowledge that cash-only businesses face a much higher risk of theft or robbery. Meanwhile, 62% of voters agree that preventing cannabis companies from using the banking system will increase the risk to public safety.

“Americans understand that no industry can operate safely, transparently, or effectively without access to banks or other financial institutions, and it goes without saying that without that access, this industry and the consumers it serves will be severely handicapped,” explains The Associate Director of NORML, Paul Armetano, in a statement on the matter. “To truly bring the marijuana industry out of the shadows, Congress must take action to repeal these antiquated and discriminatory practices,” he says.

Why we need to pass the SAFE Banking Act now

The SAFE Banking Act was introduced to the House of Representatives last March 7, 2019 thanks to Ed Perimutter (D-CO). However, the draft law had to overcome numerous hurdles in recent years.

The SAFE Banking Act was designed to provide protection for banks and other financial institutions and their insurers when they choose to work with legal cannabis companies that comply with state laws. It also prevents federal bank regulators from penalizing financial institutions if they service cannabis-related businesses. Should the law go into effect, given marijuana’s Schedule 1 status, all bank-to-bank transactions involving cannabis businesses would no longer be treated as illegal activity as they are today.

In addition, the bill would provide protections for attorneys advising cannabis companies. It would ensure that people working in the legal cannabis industry have access to legal counsel while preventing money laundering and other crimes associated with businesses that engage in cash transactions.

According to Senator Bob Menendez (D-NJ), the law can also protect auxiliaries that work with the cannabis industry. During a Senate Banking Committee hearing last week, he discussed the urgency of passing the SAFE Banking Act since it also covers insurance provisions.

“I’m concerned that non-cannabis related companies could face serious consequences,” Sen. Menendez told Kathleen Birrane, who represents the National Association of Insurance Commissioners. “Imagine a scenario where a New Jersey lightbulb manufacturer sells a product to a state-legal cannabis company and there is a lightbulb-related fire, causing the company to incur losses,” he explains. “Under current law, in the scenario I just described, could the lightbulb manufacturer’s insurance company face federal fees if they paid the claim?”

There are many lawmakers who already support the bill, although there are some in Senate leadership who do not support it.

“It’s time to close the deal in SAFE Banking Plus,” adds Sen. Jeff Merkley (D-OR). “No one has ever paid a political price for supporting cannabis in this country,” he says.

Last July, the SAFE Banking Act passed the US House of Representatives for the seventh time, but the Senate has yet to adopt it.

Menendez also authored the Clarifying Law Around Insurance of Marijuana (CLAIM) Act, which would protect insurers working with cannabis. It has been included as a provision in the SAFE Banking Act.

Security concerns aside, companies that operate on a cash-only basis see a much higher turnover rate. According to data, there is actually a 40-60% employee turnover rate in the cannabis industry. Many employees are more likely to quit because they fear the consequences of trading cash. This includes the risk of being involved in dangerous situations such as armed robbery and theft. These have resulted in employee fatalities in the past, so it’s a perfectly rational concern.

To make matters worse, cannabis companies are already struggling to attract the right employees due to banking issues. Without the SAFE Banking Act, they can’t offer 401(k) plans and other necessary financial benefits that would attract the right people. These seem like pipe dreams when basic financial services like opening a savings or checking account are already impossible. This is why the cannabis industry needs the SAFE Banking Act now.

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