Nearly three months into the new year at the time of writing (March 2023), it appears as though marijuana banking reform is back on the table in the U.S. Senate. Democrat leader Chuck Schumer has apparently told the Biden administration that he is committed to finding a way forward on giving businesses in the marijuana sector access to traditional bank services.
Schumer has the support of his entire caucus. As evidence, Colorado’s Sen. Michael Bennett pressed Treasury Secretary Janet Yellen in a recent hearing on Capitol Hill. In his remarks, Bennett made it clear that he thought marijuana to be a more important commodity than cryptocurrency. His comparing the two was not a coincidence.
Cryptocurrency is somewhat controversial for a number of reasons. Still, it is a legal asset that can be traded freely. The cryptocurrency sector has free and easy access to traditional banking. Bennett argues that the marijuana industry should have the same access.
As Things Currently Stand
As things currently stand, the marijuana industry does not have access to very many banking service. In many states, the industry is still conducted entirely on a cash basis. There simply aren’t any banks willing to take the risks. Industry proponents say things would change with a banking reform bill that guarantees banks would not be held accountable for assisting companies engaged in business that a still technically illegal.
Beehive Farmacy, one of more than a dozen medical cannabis dispensaries located in Utah, says that the lack of banking services makes it more difficult for companies like theirs to run daily operations in a safe and efficient manner. Dealing exclusively with cash adds a certain amount of unnecessary risk to the business.
Lack of banking services also creates quite a bit of inconvenience for both businesses and their customers. At the retail level, all of Beehive’s customers need to be prepared to pay with cash. But then Beehive has its own bills to pay. Without access to a traditional bank account, bills must be paid in other ways. Cash needs to be converted or vendors have to agree to take cash payments.
Senate Resistance Continues
It would seem that a banking reform bill that leaves the question of marijuana’s legality alone should have no problem passing the Senate. And yet, Senate resistance continues. Why? Because, to date, the Senate hasn’t been given a clean bill to vote on.
On the Democrat side, some senators want to couple banking reform with marijuana rescheduling or decriminalization. Bills that do not offer such language cannot get enough Democrat votes to pass. On the Republican side, there is resistance to passing a banking reform bill that tackles any issue other than banking reform itself. So bills with unrelated language attached go nowhere.
Despite Chuck Schumer’s commitment to getting a bill through this session, the chances still aren’t looking particularly good. Any bill he might manage to get through would still have to be reconciled with a bill on the House side. And the chances of that happening with a GOP-controlled chamber are pretty slim.
Time Will Keep Marching On
While the House and Senate try to figure something out in terms of banking reform, the nation’s marijuana businesses will have to continue using alternate methods of managing their finances. Time will keep marching on with or without banking reform. However, it’s not all bad.
The fact remains that state-legal marijuana is a billion-dollar business. The industry is making it work despite so many banking difficulties. For that reason alone, it may be tough to convince holdouts to get on board with banking reform.