Marijuana Banking Bill Stalls Again – This Time It’s Different

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The latest iteration of federal marijuana banking reform does not seem likely to pass before the end of the current session. That much is not surprising.  But there is something different this time around: it is the House that could hold up the bill instead of the Senate.

According to Marijuana Moment, a mere 13% of congressional staffers have faith that a marijuana banking reform bill will clear both chambers before the end of the session. When staffers were asked to rank the likelihood of each of 11 challenging issues being advanced this year, marijuana banking reform took the ninth spot. That is not good.

It is Usually the Senate

In recent years, the Senate has been the primary roadblock to marijuana banking reform. The House has done its job time and again by-passing reform bills. But when those bills made it to the Senate, lawmakers on both sides of the aisle could not seem to find enough common ground to get their own bill through.

To the amazement of many, the Secure and Fair Enforcement Regulation (SAFER) Banking Act has cleared the Senate Banking committee. Now it is just waiting to go to the floor for a full vote. Yet a floor vote approving the bill would not guarantee it becomes law.

Over in the House, there seems to be growing resistance to marijuana banking reform. Not only that, but the internal turmoil on the GOP side also suggests that the House might not even attempt to take up the issue before the end of the year. There is a very real possibility that reform could be put on the back burner until spring 2024.

The Problem for Business Owners

Marijuana banking reform is considered a critical issue right now due to ongoing conflicts between state and federal law. In the more than three-dozen states that have legalized marijuana in one form or another, operators do not have access to standard banking services. Why? Because marijuana is still federally illegal. Banks and credit unions don’t want to run the risk of doing business with companies in violation of federal law.

For marijuana industry operators, not having access to banking services is burdensome. Take the Utah cannabis dispensary Beehive Farmacy locations in Brigham City and Salt Lake City, Utah. Beehive must run essentially as a cash-and-carry business. That is not necessarily a big deal in terms of day-to-day transactions, but the company still needs to manage its revenues.

Not having access to traditional banking services makes doing business exceedingly difficult for Beehive. It is not just daily operations. What if the company wants to apply for a small business loan? It is not going to happen – at least not as easily as it is for other types of businesses.

Rescheduling Would Reduce the Risk

While Congress wrestles with trying to get marijuana banking reform done this year, there is another possibility on the horizon: rescheduling. Plenty of rumors about HHS and DEA cooperation have been circulating in Washington since late summer. It is believed that the current administration wants to see marijuana rescheduled to either Schedule II or III.

Rescheduling would immediately reduce the risk financial institutions face by doing business with marijuana companies. They would be much more inclined to begin offering standard banking services under certain circumstances.

The thing about rescheduling is that it’s not guaranteed, either. The wheels of progress move slowly in Washington, and the fact that people are talking about rescheduling doesn’t mean it will happen in short order. For now, it appears that reform in either form will have to wait.

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