Everything You Need To Know On Cannabis Banking Reform

Cannabis Banking Reform

Since California’s legalization of medical cannabis in 1996, entrepreneurs around the country have been attempting to find their place within the so-called “Green Rush.” But just like the dangerous Gold Rush of yore, this new industry is not without its problems. Perhaps chief among these are the difficulties created by the inconsistent legislation around the subject of marijuana, especially conflict between the federal government and the states.

Here are a few things you should know about how cannabis banking reform can potentially ease these conflicts.

What You Need To Know About Proposed Cannabis Banking Reform

The Conversation Itself Is A Good Sign

Business owners within the cannabis industry are in an especially dangerous predicament. While opportunities abound, there is also a terrible need for legislative and administrative changes at the federal level. The industry can take heart however that continued discussion is a good sign that progress is close. According to an article in business magazine Forbes, with the passage of time, lawmakers will begin to “harmonize” legislation. That consistency will make it easier for cannabis-based businesses to scale and even expand. Furthermore, the ongoing discussions within the public and legal spheres both serve to propel growth within the cannabis industry. Market growth could easily translate into increased political access.

What Has Not Moved Forward

Thus far, there has been no movement to directly legalize marijuana products at the federal level. Criminalizing cannabis effectively meant legal businesses within that industry were unable to access assistance from the US Coronavirus Aid, Relief, and Economic Security Act passed in March 2020. That left the entire industry of dispensaries, manufacturers, and growers to face the coronavirus fallout without the government resources afforded to other small companies. Without a change in the law, many cannabis-based businesses may not survive the current pandemic. With the Republican-controlled US Senate and Administration, large scale movement may be difficult anytime soon.

Areas Experiencing Progress

However, there is hope for the cannabis industry. Specifically, the US House recently passed another huge financial stimulus Act designed to help the nation survive through the pandemic. The new legislation, called the HEROES Act, includes terms to specifically help the cannabis industry. The provisions, collectively part of the Secure and Fair Enforcement (SAFE) Banking Act, are designed to help the industry access critical financial services. As of this writing, the HEROES Act has passed the US House but is still awaiting action within the US Senate.

Should the SAFE Act pass as it currently stands, it will provide a number of benefits to cannabis-based businesses. Some of those impacts include:

• Eliminating the possibility of punishments for financial institutions doing business with cannabis enterprises.
• Reducing the number of direct cash transactions by providing alternative transaction processes through financial institutions.
• Reducing the risks of COVID-19 exposures by eliminating the need to directly handle cash which can carry the coronavirus.
• Encouraging competition among lending institutions to provide financial tools to cannabis businesses. This can mean greater access to lines of credit, loans, and banking/financial accounts. (Cannabis Industry Journal)

In the absence of direct access to federal small business and paycheck security aid, access to financial institutions can provide a critical lifeline for the cannabis industry.

What You Can Do Now

Until the SAFE Act passes, there are still some things you can do to defend your cannabis business today. Veo Verde Technology has the expertise to provide security, IT, and technology solutions for your marijuana or CBD based enterprise. Contact us today to secure your place in the Green Rush!

Veo Verde

Veo Verde Technology is a division of its larger parent company Alvarez Technology Group. With 20 years of experience providing cutting-edge IT products and services to their customers in California, the administration of Alvarez Technology Group spotted a neglected market in the cannabis industry.