Banking is one of the most crucial resources the state-legal cannabis industry is missing out on due to federal prohibitions. Fearing retaliation from the federal government, most financial institutions refuse to work with cannabis businesses, depriving them of financial services such as bank accounts and loans.
Additionally, it forces marijuana businesses to operate on a cash-only basis, which significantly increases the risk of burglaries and robberies. However, some states have made efforts to increase access to banking services in the nascent cannabis sector in a bid to address these problems.
Former chair of the National Credit Union Administration (NCUA) Rodney Hood says that while these efforts deserve plenty of praise, chances are they won’t be enough to change cannabis banking without congressional intervention. Speaking at an Emerging Markets Coalition about the cannabis banking dilemma, he said that this issue “demands special attention.”
Cannabis has proven to be one of the fastest-growing industries in the country, generating billions of dollars in sales and creating hundreds of thousands of new jobs. If the industry is given access to banking and loan services, it has the potential to be extremely lucrative in the long term. Hood noted that the surge in crime targeting cannabis businesses led to the development of certain protections at the state level for financial institutions that worked with the cannabis industry. Lawmakers in New York are even looking to provide tax breaks for the state’s new cannabis market. Pennsylvania has also passed a bipartisan bill that would protect banks as well as insurers that service medical cannabis businesses.
Hood commended state officials around the country who are trying to find ways to give the cannabis sector access to banking services amid federal inaction. However, Hood said, what the industry really needs is a federal solution instead of a patchwork of state policies to effectively fix the cannabis banking problem. As it stands, state-legal cannabis is worth billions of dollars and is poised to grow exponentially over the years yet it has a practically nonexistent infrastructure for commercial banking. With federal legalization looming on the horizon, the need for cannabis banking has become even greater.
The NCUA has formed an internal working group to work on solutions for cannabis banking in preparation for Congressional action on some kind of cannabis banking bill. One such legislation is the Secure and Fair Enforcement (SAFE) Banking Act, which has been passed by the House several times but stalled in the Senate.
Once federal reforms are enacted, we could see a boom in the activities of companies such as Advanced Container Technologies Inc. (OTC: ACTX) since fairly uniform enabling regulations will have been established for the entire country.
NOTE TO INVESTORS: The latest news and updates relating to Advanced Container Technologies Inc. (OTC: ACTX) are available in the company’s newsroom at https://cnw.fm/ACTX
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