CALIFORNIA: On the West Coast, we have been living through several months of smash-and-grab robberies that have disproportionately targeted cannabis businesses – because they are forced to operate as cash-only businesses due to the continued federally illegal status of marijuana.
Local police have apparently at times been caught on tape reluctant to intervene in these robberies, and the looters are more than clear that these pot shops have piles of cash on hand. These cannabis businesses are powerless to change beyond out-of-date federal cannabis laws, and Congress continues to sit on the sidelines watching these violent lootings while still failing to pass the SAFE Banking Act – despite the bill passing the House six times.
While I am an ardent supporter of the sweeping social equity reforms put forth by leaders in the Senate, it’s time for Congress to stop sitting on their hands and pass legislation that will grant cannabis businesses access to safe and available banking services, and end government penalties for banks doing business with companies that handle “federally illegal” products and services.
A recent poll found that 65 percent of Americans support allowing cannabis businesses access to traditional banking services, such as a checking account or a business loan, in states where cannabis is currently legal. There are also a multitude of financial institutions that are currently banking with MRBs and actively opening accounts every day. So the American people get it, while Congress apparently does not.
While the SAFE Banking Act will not have a direct impact on smash and grab robberies, its enactment has the potential to create more banking and payment options for these businesses. There are measures that Congress can take to end stigmas about the industry and help companies do business in a more stable banking environment.
States Fend for Themselves
After the spree of smash-and-grab robberies at cannabis businesses that have rocked the West Coast, the Washington state senate passed a bill to increase penalties for pot shop robberies. While the spree of robberies was largely centered in Oakland and San Francisco, they stretched all the way up and down the West Coast of the US, even stretching as far north as into Canada. It is increasingly important that bills similar to these are passed, because even if federal banking is made available and the cash is removed, cannabis retailers will still be a target as their product is valuable both from a consumption and a black market perspective.
While it may be regrettable for states to scramble for their own answers and pass a patchwork of different state laws trying to resolve a dangerous working environment for cannabis businesses – it may be necessary for as long as the Feds stay on the sidelines.
Rep. Perlmutter has shared with cannabis trade media outlets that on the federal level, conversations are happening behind the scenes between Perlmutter’s office and key Senate leadership, including Senate Majority Leader Chuck Schumer’s (D-NY) office and Sen. Cory Booker’s (D-NJ) office, to try to get the SAFE Banking Act passed. Rep. Perlmutter has blamed both senators’ offices previously for the Senate not passing the banking legislation, and Sen. Booker once said he would “lay himself down” to prevent banking legislation from passing ahead of comprehensive legalization.
Those talks are focused on including the social equity provisions needed to win support in the Senate and get the bill passed at last. Social equity provisions include measures to release nonviolent cannabis offenders from prison, who frequently come from predominantly Black and Brown communities.
While these social equity reforms are also needed and overdue for the industry, it’s also well past due time that Congress at least grant cannabis businesses access to banking services – as they continue to face attacks that continue to capitalize on how vulnerable the infant industry remains.
Scott Solomon is the CEO at Operational Security Solutions (OSS)