In the past, all the bills and measures related to cannabis have been voted out by a Congress that was dominated by Republicans. Now the Democrats have control of the House, and the first hearing on cannabis has been scheduled for tomorrow (February 13).
This particular hearing is slated to consider making legal changes to federal laws so that cannabis businesses can access banking services.
The hearing is titled “Challenges and Solutions: Access to Banking Services for Cannabis-Related Businesses.” This hearing is intended to address the problems that legitimate marijuana-related businesses face when trying to access banking services.
For example, while state-level laws may permit cannabis businesses to open and operate in these jurisdictions, federal laws govern the banking industry and these federal laws don’t allow players in the banking industry to do business with firms involved with cannabis.
Many cannabis businesses have therefore been left with no choice but to operate on a cash basis, and stories abound of businesses that keep their earnings in sacks. In some places, unions and some banks have defied the federal government and decided to take on marijuana businesses as clients.
Even then, only limited banking services are provided by those few banks or unions that decide to accept marijuana businesses as clients. This has constrained the ability of cannabis businesses to obtain credit or even get basic banking services affordably.
It should be remembered that federal banking laws impose strict reporting requirements upon any financial institution that works with a company that is involved in an industry that is regarded as illegal. These reporting requirements inflate the cost of getting banking services.
Congressman Denny Heck, who has been an advocate of the cannabis industry for years, revealed that the hearing plans to address those issues so that the cannabis industry can handle its finances in a way that can easily be tracked by regulators for different purposes, such as ensuring that these businesses are paying their taxes as expected.
This hearing is one of the signs that cannabis may be a major issue during this legislative session. This is a positive step that hasn’t come too soon given the fact that the majority (33) of the states in the union have legalized marijuana, including at least 10 states that now allow recreational marijuana.
It makes sense that federal laws need to be reformed so that there is some kind of alignment between what is happening in the different states and the position of the federal government. Sproutly Canada, Inc. (OTCQB: SRUTF) (CSE: SPR) (FRA: 38G), Sugarmade, Inc. (OTCQB: SGMD) and everyone in the marijuana industry is waiting with bated breath to see what will come of this hearing tomorrow.
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