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Cannabi
Banking
Safe and Sound ?
by Andrew Park , contributing writer
This past April , HR 1996 was passed in the U . S . House of Representatives . This bill is commonly referred to as the “ SAFE Banking Act of 2021 .” Now given to the Senate , we wait for the bill to pass and be sent to the President to become law . Headlines have been revolving around the aspect of this bill that allows dispensaries to apply for loans from banks . In this article , we will take a deep dive into the bill to fully understand how crucial signing this bill into law is for the future of cannabis in the U . S . I write this article while reading the bill on the U . S . Congress website . Every example used in this article is word-for-word from the bill so that you , our readers , are well-informed .
First , let ’ s identify the issue at hand . Legitimate cannabis businesses cannot apply for loans and other benefits that all other businesses are eligible to have . Why ? Because the American banking system cannot use the income from the business on the loan application , as cannabis is not federally recognized as legal . This puts small cannabis business owners at a considerable disadvantage . Not being able to apply for real estate loans is a huge issue that most businesses must face when their industry is booming at the rate medical cannabis in the Midwest has been . The real question that needs to be asked is , does this bill really fix all the issues small cannabis businesses face ?
The bill begins with the purpose “… 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 ….” Fair point . When Colorado first legalized recreational marijuana , the cash would have to be stored off-site in a secure location guarded by private security firms who charge hundreds of thousands for that service . Ensuring staff and patient safety is
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of the utmost importance to every business owner .
The second section of the bill addresses Safe Harbor or Depository Institutions . One term that jumps off the page is “ depository institution .” The main reason is that credit unions are not defined in this way . However , state credit unions are included in this bill as depository institutions . Only banks and savings associations are defined this way federally . This section states that these federal regulators cannot discourage banks from offering services to cannabis businesses , essentially protecting small businesses from banks making excuses for not loaning them money .
Now the bill jumps into Protections under Federal Law for the banks , insurers , and other depository institutions . The employees of these lenders cannot be held liable under any Federal law or regulation for solely providing the financial service . Meaning , no one who gives a loan to a legitimate cannabis business can be punished under Federal Law . Let ’ s take a beat here ; as I read this bill , the language is clearly constructed to cover every base for the banks and other insurance companies . They are , after all , the ones who are putting up the money for loans and are the most “ at risk .” I put that in quotes due to the fact Missouri medical cannabis businesses alone have doubled within a year — it seems like a safe bet to this writer .
One term that is just as interesting is “ Legitimate Cannabis Business .” What constitutes a legitimate business ? The requirements are as follows ; “… a manufacturer , producer , or any person or company that — ( A ) engages in any activity described in subparagraph ( B ) pursuant to a law established by a State or a political subdivision of a State , as determined by such State or political subdivision ; and ( B ) participates in any business or organized
activity that involves handling cannabis or cannabis products , including cultivating , producing , manufacturing , selling , transporting , displaying , dispensing , distributing , or purchasing cannabis or cannabis products ….” This is great news for Missouri ; defaulting to the state laws instead of trying to fit everyone under the federal blanket will only benefit local businesses .
I strongly encourage our readers to view the bill in its entirety online by going to the website of Congress . In summary , the bill protects insurers and banks while also benefiting state-level businesses . One thing to note is — how small the bill actually is . It feels as if more amendments are in store before the bill hits the Senate floor . Missouri cannabis businesses “ Must ” be able to use banks . It ’ s just that simple ! The industry has survived and even thrived in an impossible environment . It was only mere months in which medical cannabis was legal in Missouri before the pandemic hit . The world shut down , but these small business owners thrived thanks to patient demand . Now it is time to protect their employees , services , and most importantly , the patients . Insured companies are held to a standard that allows patients to feel even more confident buying products / medicine . Thankfully , this bill will be signed into law sooner than later ; you can bank on it .
Andrew Park is the Director of Regulatory Affairs for a clinical research company based in KC . His years of experience in research have shown him the importance that treatments can always be improved . A Kansas City native , Andrew wants to serve his community through education on topics that ignite conversations . Questions ? Contact at andrewkcpark @ gmail . com .