Lawmakers in Washington DC are desperately falling behind the state’s cannabis programs which makes running a business in the cannabis industry very risky.
Since so many US states decided to legalize either medical or recreational marijuana, the cannabis industry is quickly becoming a very good prospect for investment.
Canada has already legalized marijuana for adult use, and it is seeing its own expansion as retailers start opening up stores dedicated to selling recreational cannabis.
However, in California, dispensary robberies are becoming somewhat of a common thing.
The federal government had shut down the STATES (Strengthening the Tenth Amendment Through Entrusting States) Act just a few weeks ago, a piece of legislation which would protect the interests of states where marijuana use is legal.
Businesses are overly exposed
By not allowing banks to offer their services to canna-businesses, the federal government is directly endangering a certain portion of what is now a nation-wide industry.
There are numerous ways these businesses are being exposed, but the main one is the inability to have a bank account which would allow safety for the daily turnover.
At the moment, most of the businesses are cash-only meaning that you either have to pay with cash, or you can buy something and ask for cash back from the cashier.
This allows for huge amounts of money to be held within the store or the register itself—some prominent stores can even sell up to million dollars worth of cannabis in a month.
However, that lack of regulation allows for many situations such as this one:
Cannabis stores aren’t only vulnerable at the physical location as robbers are known to ransack store owners in the after hours as they close up shops, or even pull their vehicles over while driving.
Allowing banks to regulate and patch up this huge hole in the system would make the cannabis industry much more safer as the businesses would be far less exposed to such events.
Cannabis companies lobbying at the Hill
Eaze, a weed delivery service in California spent $130,000 on hiring Holland & Knight LLP in 2018, a veteran lobbying firm.
The company is also said to have connections on the Hill with the former House speaker Newt Gingrich and the Clinton administration.
Paul Warshaw, CEO of greenRush, estimates that allowing customers to buy using their debit and credit cards “could increase business growth by 50% to a 100%”.
California is also battling another legal issue—certain parts of the state are actively trying to make the delivery of cannabis as expensive as possible.
The STATES Act isn’t the only bill in the new Congress which pushes for more rights regarding cannabis.
Rep. Earl Blumenauer has filed one of the first bills of the 116th Congress just a few days ago when he initiated the “Regulate marijuana like alcohol” bill.
With all that action in the Congress from both sides of the floor, and president Trump saying he would “probably support” the bill legalizing medical marijuana, it’s only a matter of time before the Hill passes legislation legalizing cannabis and subsequently the industry and the banking services alike.