The lack of having clear federal guidance has led Massachusetts banks into murky waters, where they can provide some services to marijuana businesses, but it still puts their Federal Deposit Insurance Corp. standing at risk.
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Have you ever talked about an initiative or solution to a problem, and realized, “Hey, practically everyone in the room supports this. Why isn’t it getting done?” Yet, Congressional roadblocks are preventing the $1-billion Massachusetts marijuana industry, of which Central Massachusetts is at the center, from fully accessing banking services.
The SAFE Banking Act, which has passed the U.S. House of Representatives seven times but never in the Senate, would allow banks to provide the full range of financial services to cannabis companies who are licensed in states where marijuana is legal. Since cannabis is fully illegal in only four states at this point, this law would provide benefits to wide swaths of the country.
The lack of having clear federal guidance has led Massachusetts banks into murky waters, where they can provide some services to marijuana businesses, but it still puts their Federal Deposit Insurance Corp. standing at risk. As a result, cannabis companies have a hard time buying real estate, their employees have limited options in securing mortgages, and even businesses and their employees who offer support services for the industry – for example, a plumbing company doing work at a dispensary’s building – are jeopardizing their banking relationships. Worcester is home to more than 20 marijuana businesses, and the state regulatory agency Cannabis Control Commission is headquartered in the city. The impact of the murky regulations is felt throughout this region.
In June, the House again passed the SAFE Banking Act, including with the support of both of Central Massachusetts’ representatives to Congress (Jim McGovern and Lori Trahan), as well as 106 Republicans. A number of U.S. senators have already expressed their support for the law, including Massachusetts’ Elizabeth Warren and Edward Markey.
Yet, the Senate isn’t acting. Sen. Sherrod Brown (D-Ohio), the chair of the Senate Banking Committee, told MJBizDaily in July one of the key holdups is a number of Democrats want to pass criminal sentencing reform at the same time, since the SAFE Banking Act would further legitimize an industry and a product over which about 40,000 people are currently serving prison sentences. We can certainly agree with that sentiment and understand their point of leverage, but that has meant a continuing stalemate on the popular bill.
While the marijuana industry continues to grow in Massachusetts, further delays in giving it full access to banking services hamstrings the industry and its diversity efforts. Our congressional delegation needs to push hard for passage, helping a nascent industry gain needed footing, while not getting caught in the politics. As if that were possible a month out from election season!
