Editors Note: This is an opinion piece.
Wednesday afternoon Senate Majority Leader Chuck Schumer (D-NY), Senate Finance Committee Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ) unveiled the discussion draft of their long-awaited cannabis legalization bill, the Cannabis Administration and Opportunity Act.
The legislation would federally deschedule the plant, while allowing states to continue governing themselves with policies they deem appropriate. It also creates much needed social equity programs and creates a strategy for taxation. The two major surprises of the day were how middle of the road the legislation comes across and how fervently Booker is opposed to allowing the SAFE Banking Act to move forward.
“If somebody tries in the Senate to do just the banking bill, they are going to make all the wealth and all the money that is going out after this, already is a multi-billion-dollar industry, what could become a bigger industry just so some people could get rich…. I will lay myself down to do everything I can to stop an easy banking bill that’s gonna allow all these corporations to make a lot more money off of this — as opposed to focusing on the restorative justice aspect,” said Booker.
Unfortunately, Booker has been led astray if he genuinely believes that SAFE Banking will do nothing except make a few rich corporations richer. There are over 32,000 licensed adult-use cannabis businesses and an additional 31,000 hemp licenses in this country, the potential benefit of the SAFE banking Act extends well beyond the perceived benefits to larger corporations. Many of these small businesses struggle everyday with exorbitant banking fees and ungodly minimum balance requirements.
“The significant majority of cannabis businesses are small businesses, many of which are women or BIPOC operated. By not having access to traditional financial services such as bridge loans, insurance, or credit card services, these small business owners are disproportionately impacted by the lack of banking services and financing to keep their doors open. Then when they fail, they are again punished with personal wealth destruction due to the lack of bankruptcy protection,” said Beau Whitney, founder and Chief Economist of Whitney Economics.
It is understandable that Booker is concerned about groups that have been disproportionately harmed by the War on Drugs being left behind with just the passage of the SAFE Banking, but it’s shortsighted to not see the benefits that it would also provide to those communities, like access to loans, lower fees and the capital necessary to grow a business.
The SAFE Banking Act also addresses the lack of safety in the industry.
“Many businesses have to operate in cash only leaving them quite vulnerable to crime, along with their employees. They cannot pay their taxes electronically and half to travel with large amounts of cash and armed guards. The SAFE Banking Act is addressing a public safety crisis for small cannabis operators,” added Whitney.
Cannabis businesses need relief now and they need it from a piece of legislation that has already passed in the House and has bipartisan support in the Senate. The cannabis industry cannot continue to wait for a pie in the sky all-or-nothing bill that Democrats don’t even support, let alone the president. And let’s get real, can the Democrats retain power in both the Senate and the House through the midterms to find another day to fight for cannabis legalization?
The one sure way to keep small businesses from succeeding in this industry is by continuing the same banking policies that currently exist today. Senator Booker, SAFE Banking is not protecting large corporations. Frankly, they have banking already.