More than 70% of cannabis businesses say that the “lack of access to banking or investment capital” is their top challenge, according to a recent survey.
Members of the NAACP’s Board of Directors have approved a resolution calling upon Congress to enact legislation that explicitly allows banks to provide financial services to state-licensed cannabis businesses.
Federal law discourages banks and other financial institutions from maintaining relationships with marijuana-related businesses because the plant remains classified as a Schedule I controlled substance. According to data provided by the US Treasury Department earlier this year, only about 11% of all US banks and about 4% of all US credit unions are “actively providing banking services to marijuana-related businesses.” Survey data compiled in February by Whitney Economics reported that over 70% of participating cannabis businesses say that the “lack of access to banking or investment capital” is their top challenge.
House members have advanced legislation, the Secure and Fair Enforcement (SAFE) Banking Act, amending federal law on seven separate occasions. Nonetheless, members of the Senate have yet to take up the bill. In recent weeks, however, some Senators have expressed an appetite for advancing an expanded version of the Act immediately following the midterm elections.
The NAACP resolution states: “The SAFE Banking Act could enable cannabis businesses with social equity licenses, diverse ownership licenses, or other licenses made available by states with medical- and adult-use cannabis laws that aim to foster a diverse and equitable industry, to better compete in the industry if it was coupled with the federal descheduling of marijuana and explicitly provided for fair terms and rates for Black-owned and social equity licensed cannabis businesses.”
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According to polling data compiled by Morning Consult in September, 65% of respondents “support allowing cannabis-related businesses to have access to banking services in states where cannabis is legal.” Moreover, 63% of voters agree that allowing cannabis-related businesses to access the banking system will help improve public safety, and 58% say that it is “important” that members of the US Senate vote to establish a safe harbor for licensed cannabis businesses.
In 2019, the NAACP for the first time called upon Congress “to remove cannabis from the list of federal controlled substances and provide federal grants to states seeking to implement entrepreneurship opportunities and job creation in the cannabis industry for low-income individuals and people of color from communities that have been disproportionately impacted by marijuana arrests and prosecutions.”
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In written testimony to Congress, NORML previously stressed the need for banking policy reform, stating: “No industry can operate safely, transparently, or effectively without access to banks or other financial institutions and it is self-evident that this industry, and those consumers that are served by it, will remain severely hampered without better access to credit and financing. Ultimately, Congress must amend federal policy so that these growing numbers of state compliant businesses, and those millions of Americans who patronize them, are no longer subject to policies that needlessly place them in harms way.”
NORML’s full Congressional testimony is online here.
This article originally appeared on NORML.org and has been reposted with permission.