Currently, the cannabis industry has a hard time accessing banking operations as only about 30 banks or financial institutions have accepted cannabis-based companies. The government is potentially missing out on hundreds of thousands, even millions of dollars by forcing the cannabis industry into an all-cash and paper institution. But why are financial companies hesitate to provide their services to cannabis companies? The answer is simple, they are afraid of getting in trouble with the federal government. Even though cannabis has been determined legal in 11 states, and soon to be more, there is still not a The Secure And Fair Enforcement (SAFE) Banking Act for the cannabis industry. A bill was drafted in 2019 to prevent limited access to financial institutions by cannabis-related businesses.
With Agenda Discovery, you can stay up-to-date on this proposed bill, and many others like it to ensure you do not miss anything important related to the cannabis industry.
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Right now, the 30 banks providing limited financial services to the cannabis industry have a high rate of fees that go along with their services. Not only that, but these banks are always in fear of the government punishing them for potentially breaking the law. That has forced cannabis companies to run a cash-only business and their accounting on paper. With this system, the government cannot prevent money laundering and it is potentially unsafe.
What would the proposed Secure And Fair Enforcement (SAFE) Banking Act do for the cannabis industry? It prevents regulators, such as the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA), from taking action against banks or credit unions who do services for legal cannabis businesses. SAFE banking for the cannabis industry would help eliminate the cash-only business model and make it reachable for the government to tax these companies.
Effects from COVID-19
With some states labeling cannabis-businesses as “essential services”, has made it difficult for companies to limit the spread of coronavirus through exchanging dirty money. However, employees do not have any other option of means of currency when banks have been denying their business. Recently, with the pandemic and the precautions of the government, the Bill has been gaining popularity amongst states.
What Will Happen? Request a Demo of Agenda Discovery to Stay Updated
The bill to legalize SAFE banking within financial institutions for the cannabis industry is most likely going to pass, however, with everything going on in the world, it’s unclear when. With Agenda Discovery’s legislative tracking, you can stay up-to-date on the latest news circling around cannabis banking. Request a demo of Agenda Discovery today!