More and more politicians are talking about marijuana and how it can be legalized. As it stands right now, marijuana is only permitted on a state by state level.
As such, with a federal ban, medical dispensaries cannot use banks. The FDIC won’t cover medical dispensaries, creating a cash-only business.
The cannabis industry has been booming – and now the Senate is ready to create legislation that provides support. However, it’s more about the banking industry than it is about marijuana.
The Senate follows the action from the House where a historic bill is being supported by Democrats and Republicans alike. The bill will provide legal marijuana businesses with access to banking services. Senate Republicans are anticipated to act since there is now the reality that there are 33 states that have legalized marijuana for medicinal and/or recreational purposes. Additionally, the number of states legalizing marijuana is increasing year after year.
After months of considering the issue, Mike Crapo, the Senate Banking Committee Chairperson, has chosen to advance the legislation.
Marco Rubio, a senator from Florida identifies that the problem keeps rising. Even those who are against marijuana can understand that if it is going to be legal, it needs to be controlled through the banks.
As such, a number of advocates are approaching the Senate. A broad, bipartisan coalition has been built so that marijuana laws are reworked.
Although many Republicans are quick to resist legalization and it remains illegal on a federal level, it is still being approved around the country – and having it controlled through the banking system helps with the drug wars going on.
The legislation going through the House will not change the legal status of marijuana. However, it will also prevent penalties from hitting banks and insurance companies who wish to serve the industry where marijuana has already been legally approved.
The Marijuana Policy Project’s Don Murphy explains that it’s no longer about cannabis. Bankers, realtors, and insurance companies are calling for this bill, not cannabis advocates.
Republicans within the House have been able to sell the bill effectively by identifying that it is banking legislation instead of marijuana legislation. Marijuana advocates are also fine with allowing banking advocates to take center stage since the Republicans are generally less likely to back a marijuana bill.
The cannabis bill is going to be a priority when the American Bankers Association members visit Washington in the fall. This means that there’s likely to be big changes throughout the industry over the next few months.
As Representative Steve Stivers (R-Ohio) explains, the politics of marijuana are changing. He explains that he is not for the legalization of marijuana but will still vote yes on the legislation because it focuses more on banking – and providing a way to control what has already been legalized across so many states.
Several protections were added in order for Republican senators to accept it more readily. This includes hemp protections for hemp-industry backers such as Mitch McConnell, who pushed hard for the legalization of hemp within the 2018 farm bill. Another provision included restricting bank regulators from cutting ties with customers using the “reputational risk” factor. Plenty of language in the bill is written to get the attention of certain senators, such as a McConnell and Crapo.
Optimism is everywhere, especially when Republicans across the Senate are buying into the bill and President Trump is not opposing it. A companion cannabis banking bill has also been co-sponsored by five Republican senators, with the lead sponsor being Cory Gardner (R-Colo.).
Presidential candidates who are pro-marijuana can’t stop talking about the progress, either. This includes Cory Booker, Kamala Harris, and Bernie Sanders. However, they would like to see more of a reform for marijuana. Booker tweeted following the House vote “We can and must do more.” Apparently, he’s not familiar with baby steps. This is a huge step, though – and won that should not be seen as anyone being pressured.
With so many states approving marijuana in one form or another, it cannot stay a cash business. The banks need a way to control it. Further, with it being limited to a cash industry, there are a number of businesses that struggle to get the control that they need over their business with regards to buying real estate, insurance, and more. If the bill passes through the Senate as easily as it did in the House, it will be the start of major changes for the cannabis industry, regardless of how this bill is being identified as a focus on the banking industry.