Tomorrow could be a historical day for the cannabis industry. The U.S. House of Representatives is set to cast a vote on the SAFE Banking Act which would allow financial institutions to service cannabis related businesses.
The current state of banking for cannabusinesses is quite the challenge. While it’s not completely impossible for them to secure a relationship with a bank, it is incredibly risky as cannabis is still illegal at a federal level. This means that state law contradicts with federal law leaving banks in a difficult position.
What the SAFE Banking Act means for the cannabis industry
It’s not very hard to imagine the challenges that arise from a lack of banking, this is something we explored previously here.
No banking access forces cannabis businesses to be cash based leading to an increase in robberies, an increase in costs and an increase in staff costs to deal with the cash.
No banking access forces businesses to calculate taxes manually and deliver them in cash by the use of armoured trucks.
Essentially, no easy access to banking is a massive inconvenience for cannabis businesses and it is a situation in dire need of change.
This is why the SAFE (Secure and Fair Enforcement) Banking Act will be a huge step forward for the industry. If this bill is passed, it would essentially create protections from federal law for banks who want to service businesses in the cannabis industry if they are complying with state regulations. Essentially it ensures, federal law can not override state law when it comes to the regulation of financial services for legitimate cannabis related businesses.
Not only will the act reduce the industry’s reliance on cash and improve the overall safety for cannabusinesses. It will also increase transparency and help law enforcement better distinguish legal cannabis from illegal cannabis which is one of Parsl’s key goals for the industry.
While this would change the accessibility of banking, it doesn’t mean that banks won’t have to do enhanced due diligence. This will still be a requirement to ensure all cannabusinesses banked are legitimate and legal.
What it means for Parsl
Parsl’s number one goal is to see the healthy development of the legal cannabis industry. We are always looking for ways to help with this process and when there are political advances regarding cannabis we can’t help but get excited.
While our stablecoin, Pods currently solves the issue to banking accessibility it also offers other benefits so our value isn’t affected if this bill is passed, if anything it solidifies it.
Regardless of the impact changes in cannabis laws have on Parsl, we ultimately want the industry to be better and continue to advance. So if we have to sometimes take the fall to achieve this we are fully supportive of this fact. Additionally, our systems are designed to mould with the latest regulations and laws to ensure Parsl users can be compliant in the simplest way.
So how likely is it that the bill will be passed?
There are a lot of factors that give the bill a good chance to make it out of the House, one being the fact that the Republican support for a cannabis related measure is the most significant we have ever seen.
There are however, quite a few roadblocks which could prevent the bill from passing. Senate Majority Leader Mitch McConnell still hasn’t given any hint that he will support cannabis related legislation. The SAFE Banking Act is dominated by democratic ideas. As there are 180 Democrats signed on as sponsors with only 26 Republicans there isn’t a whole lot of Republican support to convince McConnell to follow the democratic path.
But only time will tell the verdict, hopefully tomorrow will be a massive high (pun intended) for the cannabis industry! We’re so excited for the advances that are being made within the industry, even the attention being paid to this subject is a win! So regardless of the outcome of tomorrow’s vote, we strongly believe we are on a progressive path!