With the majority of States having either legalized or decriminalized marijuana, and the accelerated growth in both recreational and medicinal use, it’s very apparent the current banking laws need to be refreshed. Earlier this year the House voted 45-15 to move HR 1595 (SAFE Banking Act of 2019) out of committee to full chamber review. Core to HR 1595 is preventing financial institutions who work with marijuana related businesses (MRB) from being punished or sanctioned by Federal regulators. There are over 180 Congressional co-sponsors and the support of 38 State Attorney’s General. HR 1595 has bipartisan support. How quickly this issue gets resolved could be heavily influenced by the next Presidential election. With Congress now focusing on appropriations bills, The SAFE Banking Act will somehow need to be prioritized or it could get overlooked with more burning issues. Twenty of the 23 Presidential candidates have taken positions supporting the legalization of marijuana.
The immediate impact on MRB’s is access to capital to grow their business. And moving away from a cash intensive business, the proximate benefit is improving public safety. For consumers the ability to use credit cards for purchases as well as shopping on line for products would occur, and daily operations of MRB’s much more efficient and compliant.
As we have learned from early adopters, the industry would benefit from some level of regulatory guidance related to edibles; which is the largest contributor to marijuana related emergency room visits in Colorado post legalization. As the outgoing commissioner of the Food and Drug Administration implored Congress on his way out, we must expedite research related to CBD products because there are so many unknowns and misrepresentations.
Passage of the SAFE Banking Act expedites the continued emergence of MRB’s from the shadows and into the spotlight. he projected growth of the industry, combined with job creation and tax revenues should make this an easy vote for politicians seeking re-election.