The Marijuana Bank Handy, But Not Insured

Two weeks ago, pressure for congressional action on cannabis banking reform intensified as members of the National Cannabis Business Association descended on Congress for four days of lobby meetings. Meetings have been held over Zoom, as many congressional offices maintain pandemic protocols that prohibit in-person meetings.

While members of Congress have heard from many lobbyists and interest groups on this issue over the past few years, meetings like these are critical because they are the rare opportunity for representatives to hear directly from the companies most affected by the lack of access to traditional banking services. services. As president of the association, I was able to personally participate in most of these meetings and came away with the optimism that reform can be achieved before the end of the legislative session.

“Financial matters like SAFE can sometimes seem abstract to people outside the industry, which is why we have held so many meetings on the subject at this crucial time,” explained the Secretary of the NCIA Board of Directors. , Michael Cooper. “There’s just something inherently poignant about talking to the NCIA member whose dispensary was robbed or hearing about the stress a small business owner feels trying to decide if they have the cash to continue to cover the additional bank charges that the industry faces for the most basic services. . These meetings are just another way to put specific faces and stories on the costs of delayed cannabis reform that professional NCIA lobbyists focus on every day in their meetings.

As we reach the middle of 2022 and get closer to election season, the window for passing banking reform and other laws is getting shorter. With Republicans widely expected to regain control of one or both houses of Congress next year, and with GOP leaders showing little interest in cannabis reform despite the issue’s popularity with Republican voters, it is crucial that Washington officials hear from voters and small business owners. on the need to provide relief through banking and other measures.

And, unlike previous pushes, cannabis banking reform finally seems within reach. Earlier this year, the House of Representatives passed the America Competes Act which included language dealing with reforming cannabis banks; this language did not appear in the Senate version of the same bill. As a result, it is now up to a conference committee made up of bipartisan members from both houses to propose compromise legislation, and the cannabis industry is making an aggressive effort to ensure banking reform remains in the final bill. .

Here are some takeaways from the National Cannabis Industry Association’s Federal Lobby Days.

Cannabis bank reform is bipartisan

Over four days, NCIA members met with House and Senate staffers and members of both parties. Among Democrats, support is nearly universal, but the debate continues internally between settling for piecemeal solutions like banking reform or continuing to push for full legalization. While many GOP offices did not support legalization or comprehensive cannabis reform, most expressed support or openness to supporting access to banking services for these companies.

Support for banking reform among Republican offices stems from the fact that most see it not as a cannabis problem, but as a banking problem. The SAFE Banking Act has the strong support of the American Bankers Association, a powerful trade group representing banking industry interests with much influence in Washington, DC, particularly among Republicans. An important component of access to banking services would be tracking all cannabis-related business transactions, helping to ensure that businesses follow state rules and do not engage in money laundering or product diversion. .

Representatives of both parties also see cannabis bank reform as a public health and safety issue. As the recent spate of dispensary robberies and shootings has shown, cannabis dispensaries can be a magnet for robberies because they are forced to do cash business. Allowing these stores to accept credit cards and other forms of payment, and to make regular bank deposits of the money they still receive, would eliminate a massive target on the backs of these stores and make them less likely, and their employees, to be victims of senseless and preventable theft and violence.

The Challenges of Getting to “Yes”

Despite strong support for banking reform among members of both parties and real progress in recent months, there is no guarantee that access to cannabis banks will become law this year. This is largely due to infighting among Democrats over the best path to reform this Congress.

Senate Majority Leader Chuck Schumer has promised the introduction of a comprehensive reform bill this year, though the date has been pushed back several times. Schumer has declared his opposition to passing banking reform in the meantime, fearing it will cut the veils from his broader package.

But pushing for broader reform could cost him the ten GOP votes he needs to pass any legislation, as Republican senators remain largely opposed to anything beyond banking access to cannabis companies.

Meanwhile, Democratic senators like Senator Patty Murray of Washington, the top Democrat on the competition law conference committee, have been outspoken about the need for banking reform now, telling a recent conference release: “There is [marijuana legalization] bill in the Senate which is much broader and covers many different issues regarding the cannabis industry — which I think is very important — but the fact is that it will take a long time to convince people to have it adopted by both chambers. We need to address this issue in terms of banking and security now. This is the argument we make. »

Lack of access to banking services has real impacts on cannabis businesses large and small

Members of Congress have heard from lobbyists and interest groups on all sides on this issue, from trade associations to prohibitionists to supporters of legalization. But they don’t often hear from real cannabis business owners about how the lack of access to banking services negatively impacts their ability to conduct normal business.

Members of Congress have heard how businesses struggle to get traditional loans and are forced to borrow money at interest rates that often approach 20%. They heard about the security measures that businesses must take to protect their employees against theft and burglary, both at the store and when transferring money to the small number of banks willing to take their money because the services of armored cars refuse to do business with industry. And of course, they’ve heard of the chaos every cannabis business has had to endure when they inevitably have a bank account closed out of the blue.

“Running a business is hard, running a cannabis business is even harder, running a cannabis business while constantly having closed bank accounts is next to impossible,” explained Mark Passerini, founder of the Om of Medicine, the oldest cannabis dispensary in the east. of Mississippi “In 11 years, we have gone through 10 banks, which complicates the management of payroll, the follow-up of invoices, the payment of suppliers, etc. It also puts our employees in danger on a daily basis. The cannabis industry should be treated like any other legal business in the United States. We need SAFE Banking now!”

The voices of small business operators are crucial

Elected officials often emphasize in their campaigns the need to support small business owners. But far too often, the only voices they hear are those of large corporations whose agendas differ from the family businesses that make up the majority of business owners in the country. The cannabis industry is no exception.

The nation’s largest cannabis companies can afford high-priced, powerful lobbyists and membership in exclusive trade associations that cost hundreds of thousands of dollars a year. That’s why it’s crucial that members of Congress hear from business associations representing all cannabis business owners like the NCIA, and those representing social equity and diverse business owners like the Minority Cannabis Business Association, who both came out strongly in favor of the bank. reform.

More importantly, members of Congress need to hear from the members of these organizations themselves, telling the stories of how their businesses have suffered by not being treated like business owners in any other industry.

“Our annual Lobby Days are probably the only time of year when members of Congress and their staffs hear about ‘Main Street’ cannabis companies. en masse– the small, medium and social equity enterprises that make up the majority of our industry and NCIA membership,” explained NCIA Chairman Emeritus Khurshid Khoja, also a former member of the Minority Cannabis Board of Directors. Business Association.

“The experience is also incredibly empowering for our members, as it underscores both their agency as individual business owners and also the influence they wield when working together to change laws that harm them. Today, there is no shortage of well-paid cannabis lobbyists and deep-pocketed multi-state and multinational corporations who regularly advocate for laws and policies that put “Wall Street” cannabis interests first. Our members are able to give our Representatives and Senators a real, ground-level, day-to-day view of the cannabis industry that contradicts the prohibitionist narrative – that the cannabis industry is dominated by big corporations. soulless alien societies. seeking government assistance to seek profits for shareholders at the expense of their employees, consumers, communities and the public interest.