A bill by the US House of Reps has got marijuana business optimistic about the future.
As legalization spreads from state to state, a cohort of lawmakers think it’s wise if we allowed legitimate cannabis business access to banking and financial institutions.
And if the bill passes Senate, we may never see marijuana retailers and their customers carry around cash in thousands of dollars just because a bank is legally unable to initiate such transactions.
As we speak, merchants in the sector are forced to take customer payments, clear payroll, pay taxes, and sort out supplier invoices using cash, which is not only risky but also archaic and tiresome.
So what exactly will the Secure & Fair Enforcement Banking or SAFE Banking Act do?
How theBill will Ensure Safe Banking
If the bill passes, federal regulators will no longer be allowed to;
- Cancel or limit a bank’s deposit or share insurances merely because it offers financial services to a legal cannabis-based business.
- Prohibit a banking institution from providing financial services to a cannabis-based business.
- Discourage a financial institution from offering services to an account owner merely because the account owner is linked to a cannabis-based business.
- Scrutinize a loan issued to an individual merely because theyown acannabis-based business or owns a property estate or equipment rented to one.
- Penalize a bank for processing or taking payments for a cannabis-based business.
The bill has already passed the House of Reps with a bipartisan vote. Now, banks and credit unions— whom to the surprise of many came together to support the proposal—are counting on the Senate to approve the proposition to a federal law. Marijuana merchants are alsoexpect to benefit significantly from this law as it would open doors to banking services.
But analysts say even passing such laws may not lead to the immediate stabilization of checking accounts for marijuana-based merchants.
It must be understood that the law protects banking institutions, not marijuana business by ensuring supervisory bodies won’t target and penalize them for taking finances from cannabis-based businesses regardless of marijuana federal regulations.
Though the marijuana industry is still a long way from complete decriminalization, the SAFE Banking Act will be a historical regulation if it passes senate.
But judging from how far we’ve come, we may as well say lawmakers are finally realizing the real potential of the cannabis sector.
Author bio: Michael Hollis is a Detroit native who now lives in Los Angeles. He is an account executive who has helped hundreds of business owners with their high risk ach processing solutions.He’s experimented with various occupations: computer programming, dog-training, scientificating… But his favorite job is the one he’s now doing full time — providing
business funding for hard working business owners across the country.