Try this for irony: without access to the banking system, some cannabis businesses rent old bank vaults to store cash.
That was one example of cumbersome business practices in today’s marijuana industry, due to federal treatment of cannabis as an illegal and controlled substance while legalization expands at the state level.
At a hearing, Tuesday (July 23), the US Senate Banking, Housing & Urban Affairs Committee heard plenty more side effects of the federal-state dichotomy facing the cannabis business. I attended that hearing. I sat next to a leader of the Cannabis Trade Federation, one of the industry groups pushing Congress to normalize banking and tax treatment of the pot business.
Here are my top takeaways, as the out of home industry navigates its growing business relationship with cannabis:
- Republicans are key to federal reforms. The Tuesday hearing was chaired by conservative US Sen. Crapo (R-ID). His state has not legalized cannabis, like neighboring states. But Crapo seemed curious, even sympathetic, to business problems created by the federal-state dilemma of cannabis commerce. According to industry leaders, another key Republican is Sen. Lindsay Graham (R-SC), chairman of the Judiciary committee.
- The weed industry wants Congress to pass the SAFE Banking Act, which stands for Secure and Fair Enforcement act and would protect institutions that provide financial services to cannabis businesses. It is sponsored by 206 Representatives and 31 Senators.; Senate sponsors are by a bipartisan duo of Sen. Cory Gardner (R-CO) and Sen. Jeff Merkley (D-OR). Merkley said the status quo is a “risk to the economy, financial institutions, and public safety caused by the uncertainty between federal and state law.”
- Congress is hearing about these business problems caused because cannabis companies that operate outside the interstate financial services system:
- Old storage lockers serve as fake vaults for cash
- Interstate commerce common to other businesses is hindered or cut off to cannabis businesses, such as buying and delivery of online office supplies, creating 401(k) accounts for employees, and delivering direct-deposit payrolls
- Handling/moving/storing large amounts of cash creates vulnerability to crime
Register for the FAQs of Cannabis OOH Advertising webinar September 18 at 2 pm ET.