For legal cannabis businesses, getting a loan from banks is no less than a nightmare as cannabis is still federally illegal.
But what else can banks do? Especially, when they are always at risk of running into money-laundering troubles if they provide financial aid even to well-established, reputed marijuana companies. The current situation, though, is more frustrating from the point of view of small-scale businesses, the founders of which have no place to go for loans, as even credit unions, card networks, and other payment services providers do not entertain them.
This situation, however, is soon going to change as the Cannabis Banking Bill has gained momentum in the U.S. House of Representatives, although there is still a long journey before the bill would become law.
The U.S. House Financial Services Committee was set to vote on March 27 on the Secure and Fair Enforcement of Banking Act of 2019, better known as the SAFE Banking Act. The results of the voting are yet to be made public.
The SAFE Banking Act, introduced by Rep. Ed Perlmutter (D-Colo.) with 132 Democratic and 12 Republican co-sponsors, would allow banks to work with dispensaries, growers and other cannabis businesses, bringing traditionally cash enterprises into the financial system.
Perlmutter had introduced similar legislation six years ago; however, in recent months the idea has gained bipartisan support and the backing of big players in the corporate world.
Only recently, the American Bankers Association (ABA) came out in complete favor of the bill, urging Congress to clear up what is a confusing situation for the banks. “The SAFE Banking Act would provide some clarity for banks operating in the 33 states that have legalized some form of cannabis,” a representative for ABA told a leading news website.
The Safe Banking Act still faces resistance from some lawmakers who believe that instead of dealing with the banking aspects of marijuana, the concerned institutions should shift focus on getting the drug downgraded on the federal schedule of controlled substances.