Cannabis banking has been one of the most contentious issues since states began legalizing medical and recreational cannabis. Although more than 30 states now allow the purchase and use of either recreational or medical cannabis, federal law still classifies cannabis as a Schedule I controlled substance.
As a result, players in the cannabis market typically cannot access financial services that are accessible to every other industry This includes access to banking institutions and federal aid, forcing businesses to operate on a cash-only basis and making it difficult for them to access capital.
Lawmakers introduced a bill called the Secure and Fair Enforcement (SAFE) Banking Act in 2019 to finally grant cannabis businesses access to financial services. However, despite being passed by the House several times, the SAFE Banking Act has consistently failed to advance past the Republican-controlled Senate.
A group of senators has now revealed that it hasn’t given up on the cannabis banking bill and is poised to vote on the banking bill in a key committee. In a recent series of interviews, several senators discussed their opinions on the controversial cannabis banking act.
Senate Banking Committee chair Sherrod Brown said that he would like to hold a committee vote on the bill after the July 6, 2023, recess. However, Brown said that the vote depends on whether unrelated legislation that had passed through his panel advances past the Senate floor. The committee held an initial hearing on the banking legislation in May and is currently debating section 10 of the proposal under the guise that it could significantly limit regulators’ ability to deal with people taking advantage of banking services.
The issue was first flagged by Senator Jack Reed, who argued that the language used in the section would make it harder for regulators to point out customers who present a risk to banking institutions, allowing for the proliferation of criminal activity in various sectors.
According to Senator Steve Daines, the cannabis banking bill still has the best chances of advancing through Congress even with Republicans holding a majority position in the House. Still, Daines noted in a separate interview that committee members still hadn’t reached a consensus on a final deal and are still holding discussions on the matter. He said that Democratic senators should limit the scope of the legislation to increase its chances of passing.
According to a spokesperson from Daines’ office, the Republican senator is open to revising the bill to add provisions for the expungement of prior cannabis-related convictions.
When marijuana banking becomes a reality, more industry companies could access the funding they need to expand their operations, and this could in turn create a bigger market for downstream businesses such as Advanced Container Technologies Inc. (OTC: ACTX).
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