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Tuesday, Aug 16, 2022
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.

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Most US cannabis operators cite lack of banking as top concern: report

A Democrat representative has included the SAFE Banking Act as an amendment to an upcoming economic development bill

Majority of US cannabis operators still report lack of banking as biggest concern for the industry
Public Domain Image via Wikimedia Commons

After years of not being able to access mainstream financial services, American cannabis operators continue to call for federal banking legislation that would change their fortunes.

In a new report by consultancy Whitney Economics, 72 per cent of pot companies listed a lack of financial services as their biggest concern. Other issues included market volatility, big business competition and high taxes.

“Operators are kept up at night worrying about how to survive in an environment where there is little support, extremely strong competition from illicit dealers from one side, and the existential threat of corporate competition on the other,” Whitney policy advisor Beau Whitney said in a statement.

“The only solution for operators is to advocate for a level playing field and hope that reform will occur sooner, and not later,”

Only 42 per cent of respondents reported turning a profit.

In terms of profitability, women and BIPOC respondents are faring “much worse” than their white male peers.

Read more: Credit card for cannabis stores to launch in US

Read more: Republican bill seeks to federally legalize and tax cannabis

SAFE Banking Act added to America COMPETES Act

On Friday, bill sponsor Rep. Ed Perlmutter (Democrat) said he filed the SAFE Banking Act as an amendment to the America Creating Opportunities for Manufacturing Pre-Eminence in Technology and Economic Strength (America COMPETES) Act, introduced Jan. 25.

The US$250-billion legislation aims to invest in domestic research and manufacturing to enhance the country’s global competitiveness, and incorporates several bipartisan provisions that have already passed the House as stand-alone measures.

Since 2013, Perlmutter has been introducing a version of the SAFE Act during every session of Congress.

The American Banking Association has shown its support of the bill, as previously stated in a letter to members of the House Financial Services Committee calling on them to pass the bill this time around.

The Secure and Fair Enforcement (SAFE) Banking Act passed the House of Representatives for a fifth time in September as part of next year’s defence spending bill. But in December, the text of the National Defense Authorization Act (NDAA) was released, and didn’t include the banking bill.

Advocates and other bill supporters have expressed disappointment over the decision, given that businesses are operating solely in cash and employees face safety risks like burglaries, armed robberies and theft.

Under the SAFE act, money coming from legal cannabis firms wouldn’t be considered unlawful anymore, sparing banks from working around anti-money laundering laws to conduct business with pot companies.

The act would also open up credit card transactions instead of cash, which have made businesses more susceptible to theft.

Read more: SAFE Banking Act pulled from defence bill

Read more: SAFE Banking Act inclusion in defence bill improves odds of passing Senate, lawyer says

Last week, Senate Majority Leader Chuck Schumer met with cannabis reform and advocacy groups to discuss social equity concerns, and discuss the Cannabis Administration and Opportunity Act (CAOA), which is slated to be introduced this year.

Attendees included Cannabis Regulators of Color Coalition, Women Grow, Immigrant Defense Project, Drug Policy Alliance, Women Grow, VOCAL-NY and Rochester NORML.

 

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