In an open letter to Congress, the American Bankers Association urged lawmakers to pass the Secure and Fair Enforcement Banking Act of 2021, which would open up traditional banking to marijuana-focused businesses.
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With Cannabis Sales Rising, Lack of Banking Access Creates Public Safety Issues
Because cannabis is still listed as a Schedule I drug by the U.S. Drug Enforcement Administration, dispensaries and other marijuana-based businesses operating in states where it is legal are barred from holding business bank accounts. Furthermore, ancillary businesses that deal in the industry cannot use credit cards or checks to pay cannabis-based providers.
Since legalization began, the cannabis industry has expanded beyond just dealing in ingestible products. The approval of Epidiolex by the U.S. Food and Drug Administration in 2018 expanded the industry into pharmaceuticals. Other companies produce a number of beauty and wellness products featuring cannabidiol, the non-psychoactive compound found in industrial hemp plants.
This all-cash environment creates multiple hazards for the businesses themselves, along with headaches for taxing authorities and regulators. With Marijuana Business Daily estimating retail sales growing beyond $20 billion in 2021, the ABA is encouraging lawmakers to open up retail banking to the cannabis industry through the SAFE Banking Act.
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"ABA does not take a position on the legalization of cannabis. Nevertheless, our member banks find themselves in a difficult situation due to the conflict between state and federal law, with local communities encouraging them to bank cannabis businesses and federal law prohibiting it," the letter reads. "Congress must act to resolve this conflict between state and federal law."
If the bill is passed, it would prevent a federal banking regulator, such as the Federal Deposit Insurance Corporation, from penalizing banks that provide services to legal marijuana- or hemp-related businesses. It would also offer protections to banks, credit unions and their employees who do not necessarily know if their clients are involved in the industry.
The bill's introduction marks the third time it has been considered by lawmakers since 2017. Previous attempts saw the legislation fail during the committee phase.
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Bill Gets Support From Other Financial Industry Organizations
The ABA is not the only group asking Congress to move the bill through both chambers and to the White House. The Credit Union National Association is also behind the bill's passage, going so far as to testify in support of the proposal in both the U.S. House of Representatives and U.S. Senate committee hearings.
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This article originally appeared on GOBankingRates.com: American Bankers Association Urges Congress to Pass Cannabis-Friendly Banking Bill