The state-legal cannabis industry has been subject to tons of hurdles ever since marijuana was first legalized. Due to federal prohibition, institutions like banks have avoided the industry, denying them access to vital services like cashless payments. Once the coronavirus pandemic hit and the dangers of cash transactions were exposed, change had to be affected.
Now, House leadership has unveiled a coronavirus relief bill that includes provisions to protect banks that service marijuana businesses from federal retaliation. This had long been a bone of contention for advocates, stakeholders, and lawmakers even before the pandemic, and they have been pushing for cannabis reform to be included in the next coronavirus relief bill.
The Secure and Fair Enforcement (SAFE) Banking Act was passed last year, and it contained language that protected banks that serviced marijuana businesses from being penalized by the federal government. That language was incorporated in this recent draft coronavirus relief bill, granting the cannabis sector a much-needed lifeline in these trying times.
“The purpose of this section is to increase public safety by ensuring access to financial services to cannabis-related legitimate businesses and service providers and reducing the amount of cash at such businesses,” states the text of the provision.
According to a summary of the legislation, the banking section would “allow cannabis businesses, which in many states have remained open during the COVID-19 pandemic as essential services along with their service providers, to access banking services and products, as well as insurance.”
“This section,” it continues, “also requires reports to Congress in access to financial services and barriers to marketplace entry for potential minority-owned cannabis-related legitimate businesses.”
Advocates have also been asking lawmakers to include provisions in the next coronavirus relief bill that grant cannabis businesses access to relief funds through the Small Business Administration (SBA). Cannabis businesses and those that work indirectly with them such as accounting and legal firms are currently barred from accessing these funds due to federal prohibition.
Despite pleas from numerous advocates, stakeholders, and lawmakers, such provisions were not included. However, it does contain a section that could help individuals with prior convictions to become eligible for SBA’s Paycheck Protection Program (PPP).
It states that the agency’s lending service “shall include a statement that an applicant is not ineligible for assistance under this paragraph solely because of the applicant’s involvement in the criminal justice system.”
Rep Ed Blumenauer, who introduced a bill calling for SBA access to cannabis businesses, says that the inclusion of the SAFE Banking Act is recognition that cannabis businesses have been classified as essential. “Prohibiting these businesses from banking and forcing cash-only transactions in the middle of a global health crisis is irresponsible and wrong. The passage of the bipartisan SAFE Banking Act, is good not only for the industry but our communities and public safety as well.”
Analysts say sector players like Sugarmade Inc. (OTCQB: SGMD) will be hoping that this time round, the legislators see the logic making it possible for cashless transactions in the marijuana industry during this pandemic and beyond.
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