There’s so much money to be made in cannabis, but not a lot of places where you can put it.
Federal law prohibits commercial banks and credit unions from working with businesses that sell or manufacture cannabis products, which means they can’t open accounts or obtain loans.
That’s why you’ll see heavy security at so many dispensaries: metal detectors, guards, or even smart cars that roam the surrounding neighborhood. At any given time, these storefronts can have a risky amount of cash floating around.
Though the Obama administration’s Department of the Treasury provided a few guidelines for cannabis banking under a directive by the Financial Crimes Enforcement Network, they’re pretty loose. So, late last month, Congress members from Colorado, Washington, and Alaska introduced the Secure and Fair Enforcement Banking Act, a.k.a. the SAFE Act, which was co-sponsored by local representatives Barbara Lee and Eric Swalwell.
This is the third attempt to pass such legislation, after failed efforts in 2013 and 2015. But since then, even more states have legalized at least some form of marijuana, meaning more and more constituents across the country are dealing with this problem.
Hopefully there will be more congressional support this time around, because, with California expected to rake in billions next year once Proposition 64 goes into effect, the SAFE Banking Act is a necessity for the region’s businesses.
At the state level, the Cannabis Banking Working Group, which was established after the passage of Proposition 64, is working to solve many of the problems caused by the lack of banking access.
And if the act fails like its predecessors, the City of Oakland is already looking into providing its own financial support system for the local cannabis industry. By opening a public bank, one of the first of its kind in the country, businesses will be able to operate with more freedom and less fear.