Xavier Becerra, the Attorney General of California, joins a bipartisan group of 34 attorneys general to show his support for allowing the marijuana businesses to use traditional banking services. He urged the Congress to approve the coronavirus relief package that would authorize the same.
Banking services are not accessible to the cannabis businesses, even in states that have legalized the use of medicinal as well as recreational marijuana. This is because marijuana remains illegal under federal law.
As a part of the $3 trillion HEROES Act, the Democrat-controlled House approved the idea of granting banking access to marijuana businesses on Friday, May 15. Through the HEROES Act, the government aims to provide the most significant package of programs to moderate the economic fallout that resulted due to the coronavirus pandemic.
However, the idea isn’t concurrent with both parties. The GOP-controlled Senate has been very vocal about their views on the federal legalization of cannabis and has opposed it vehemently. The Republican leaders have been blasting the HEROES Act, particularly the permission to give banking access to the marijuana businesses.
Since cannabis has been deemed essential and is legalized with varying restrictions in California and other states, Becerra and the other attorneys general believe that it is of paramount importance to pay attention to the aspect of safe transactions for cannabis businesses, especially due to the spread of the virus.
A letter was signed on May 19 by Becerra and his colleagues, who stated that the threat to public safety was intensified since the pandemic began because the cannabis industry is primarily a cash industry.
The letter notes that the cash transactions put everyone at risk of being exposed to the virus. Moreover, the letter notes that since massive budget shortfalls are predicted at the state and local level both, the government would need “the ability to efficiently collect tax revenue from the marijuana industry, estimated to have generated $15 billion in sales in 2019.”
On Tuesday, Becerra tweeted, “It’s unwise and untenable to keep a $15 billion industry in the shadows — especially in the midst of an economic downturn.”
Many cannabis insiders hoped for Democrats’ latest stimulus bill to include opening small business loans to the marijuana industry, but that did not happen. Nevertheless, the bill includes language from the SAFE Banking Act.
The SAFE Banking Act was standalone legislation that was introduced in 2019, which protects the financial institutions that provide banking services to the state-legal marijuana businesses from federal regulators.
The cannabis banking bill was approved on a bipartisan vote by the House members in September. But, it has since stalled in the Senate Banking Committee.
The Republicans think it is inappropriate to include cannabis banking provisions in the HEROES Act. Even people who support the cannabis industry’s access to banking question its inclusion in the package.
House Minority Leader Kevin McCarthy, R-Calif., told CNBC on Tuesday, “If you read that bill, it mentioned cannabis more than it ever mentioned jobs.” He further adds that much of the bill included legislation that the Democratic members have wanted to pass before the spread of the pandemic.
Michael Sassano, the founder of Solaris farms, is of the opinion that “placing this initiative inside a $3 trillion spending package only distracts from the true spending that is needed to help people.”
However, Shawna Vercher, political media strategist, and industry advocate believes that cash transactions are no more safe for the workers or the customers. She added that it has been for many years that cannabis businesses have had to deal with exploitative lending and exorbitant banking.
On Tuesday, Senate leaders told reporters that they’re in no rush to consider any further stimulus funding. Despite the support, it looks like the banking policy might take some time before it sees the light of the day.