A coalition of marijuana-advocacy groups has asked that a bipartisan marijuana-banking bill be expanded so that cannabis businesses can access all financial services, including the ability to list on major U.S. stock markets.
In a letter to Senate Banking Committee leaders on Thursday, SAFE Banking for Equity stated that they appreciate the fact that the panel “treats this issue with urgency” by hosting an hearing on financial barriers for the cannabis industry last Monday.
The groups, which include California Minority Alliance Minorities for Medical Marijuana Women Grow and National Hispanic Cannabis Council, also said it was important to amend the SAFE Banking Act in a significant way, but that this may be too much for some advocates who are focused on comprehensive legalization.
The SAFE Banking Act protects banks who work with state-licensed cannabis businesses and certain depository institution from being penalized.
The coalition wants a wider safety net to allow industry access ” to all regulated institutions and services including depository services and lenders, debt and Equity financing, Capital Markets and Investment Services, Insurance, Broker Dealers, Fiduciaries and Credit Card and Payment Processing.”
The letter states that “Giving the cannabis industry in every state legal access to financial institutions, resources and other services is essential for economic growth.” “Without greater access to financial institutions many entrepreneurs will be unable to obtain the funds needed to start their business or expand operations.
#SAFEBanking is a solution that addresses the needs of cannabis operators, particularly small and minority-owned businesses. “Without access to capital, the cannabis industry is at a disadvantage and will never achieve its full potential.” – Antonio Valdez, , @nhccouncil.
#SAFECANTWAIT May 16, 2020 HTML0
The groups stated that by limiting access to financial services for the cannabis industry, operators are forced “to battle against the illicit market – including Chinese-backed investors – with both hands tied behind theirbacks”.
If small and minority-owned marijuana companies lack the capital to compete and stay afloat, they will lose the market to criminal enterprises who do not follow strict testing and labeling standards. They do not care about age restrictions or child resistant packaging. And, of course, they do not pay taxes nor invest in their community. Unchecked illicit markets would ultimately be disastrous for legal, regulated business and threaten public safety.
The report also stated that the access to senior exchanges in the United States, rather than junior exchanges would “significantly increase” the valuations for small marijuana businesses. “This would result in a dramatic reduction in the amount equity an entrepreneur has to give up to receive the same investment.”
The letter states that “maintaining equity” is crucial for operators who have social equity licenses, which require them to retain majority ownership in their company. “Without meaningful capital for conversion of these social equity licences or for minorities operators to succeed, states’ efforts to promote a more equal industry are simply checking a box. Small businesses will be shut out and the illicit market will profit in the void.”
Reps. Last Congress, Troy Carter (D-LA), Guy Reschenthaler(R-PA), and others had introduced a bill that would have permitted cannabis businesses to list on national stock exchanges as well as access other financial services. However, the bill did not progress.
—
Marijuana Moment is tracking over 1,000 cannabis, drug policy and psychedelics bills that have been introduced in state legislatures this year. Patreon Supporters who pledge at least $25/month have access to our interactive charts, maps and hearing calendar.
To get access, become a Patreon member and learn more about our Marijuana Bill Tracker.
—
As of yet, the leadership in Congress has not identified more extensive financial protections as being a priority when it comes to the SAFE Plus package. The plan is for the bill to be passed as it was introduced and then amendments will be considered on the floor.
Chuck Schumer, the Senate Minority leader (D-NY), has stressed that the amendments must be aimed at addressing the negative effects of the drug warfare. He and his colleagues have called for the inclusion language in order to facilitate marijuana expulsion.
Jacky Rosen, a Nevada senator, said recently that the SAFE Banking Act should be passed with an amendment to allow cannabis businesses access to federal Small Business Administration services (SBA).
It is easier to sell the idea of giving small marijuana companies access to federal services, but the ability to list on major stock markets could be a harder sell. This would likely receive pushback by advocates who are generally sceptical of incremental reforms which primarily benefit corporate interests.
Cat Packer, vice-chair of Cannabis Regulators of Color Coalition and director of Drug Markets and Legal Regulation at the Drug Policy Alliance DPA (DPA), said to Marijuana Moment that allowing Wall Street to invest while marijuana is federally criminalized shows the federal government prioritizing the corporate interests of corporations over criminal justice reform.
Packer, an invited witness to the Senate Banking Committee’s hearing last week, stated that it was a joke that Black businesses would benefit from access to stock markets in a manner that would justify prioritizing that issue over others that impact lives and communities that are most affected by cannabis criminalization.
Schumer also said that he wanted to schedule a vote in the committee “in the near-future”, so that the members could discuss the proposed additions. Sherrod Brown, the chairman of the Banking Committee (D-OH), said that Senators were planning to “move rapidly” with regard to SAFE Banking Act.
The majority leader has stressed his commitment to advance the marijuana banking legislation, which includes criminal justice provisions. He called the larger effort to repair the damages of the drug-war “moral responsibility” on the part of Congress.
Some advocates believe that part of their responsibility is to advocate against the addition of language that might threaten legalization efforts or contribute to corporate consolidation.
Shaleen title, the founder and director at the Parabola Center told Marijuana Moment that she couldn’t understand how allowing large companies to be listed on Wall Street would help small businesses. “Let alone, the idea that the stock exchange is the most important cannabis issue, and that Congress should prioritize it over freeing prisoners or protecting cannabis patients,” said Title.
Schumer stated last month that he is “disappointed,” that the so-called SAFE Plus cannabis reform package did not advance last year. He added that “we were close” but “we ran up against opposition at the last minute.” legislators will continue “to work in a bipartisan manner” in order to accomplish the task.
In the first months of the new Congress, the majority leader has met with Democratic members and Republican members to discuss marijuana reform proposals which might be able to garner bipartisan support this year.
Booker recently said that lawmakers are trying to “resurrect the cannabis reform package“, acknowledging that the failure to advance a bank fix for the industry means “literally that hundreds of businesses will go out of business.”
Rep. Earl Blumenauer, D-OR, who is sponsoring a House version of SAFE Banking Act said that he believes it’s crucial that advocates and legislators align on any incremental proposal to end the war on drugs, warning that an “all or nothing” mentality.
The American Bankers Association (ABA), which also renewed its call for passage, did the same. All 50 state chapters of the ABA did the same. Insurance and union organizations also wrote to Congress.
Below, you can read the letter of the advocacy coalition on the expansion of the marijuana banking law:
Politicians And Government Agencies Mark 4/20 As Marijuana Legalization Movement Expands
The article Groups Press Senators to Add Marijuana Business Stock Exchange To Banking Bill first appeared on Marijuana Moment.
