Marijuana still faces banking challenges due to federal restrictions
Despite increased adoption of cannabis around the country, the federal government is still behind in creating its own legislative framework. This is making it difficult for entrepreneurs in the industry to gain access to banking operations, as many financial institutions maintain a hands-off approach in an effort to keep on the good side of the feds. A recent banking bill in California was shot down, adding to the challenges faced by the expanding marijuana industry.
The bill, SB-930, would have seen the creation of a state-chartered banking system and would have given marijuana businesses access to a range of financial services. Unfortunately, the bill didn’t make it through the state’s Assembly Appropriations Committee vote. The bill’s sponsor, Senator Bob Hertzberg, responded to the rejection, saying, “This is a serious public safety issue that deserves swift resolution. We’ve got barrels of cash buried all over the state, businesses being ransacked and it’s clear that the federal government won’t act.” He added, “It’s a shock to me that the state government may not act this year either — especially after this bill passed through nearly every step with bipartisan support and little to no opposition.”
The industry was shocked, as well. Alt Thirty Six, a cannabis payment technology company, had its hopes set on the bill making it all the way to the governor’s desk. Company co-founder and CEO Ken Ramirez said, “California has the world’s fifth-largest economy and a cannabis market expected to exceed $24 billion by 2025. Given this recent development, new methods for cannabis banking and payments will inevitably gain traction as merchants desperately seek alternative ways to move and store funds aside from cash.”
Despite an overwhelming majority of Americans supporting marijuana – 64%, according to a recent Gallup poll – the federal government is shuffling its feet and isn’t addressing the issue. Since Capitol Hill doesn’t seem to want to take a sensible approach, alternative options to handle banking needs might need to be created. One of these could potentially be another new-ish technology, the blockchain. As Ramirez explains, “There are many uses for blockchain, with one of them being digital payments. With blockchain, you can process payments outside of the traditional financial networks, allowing merchants to experience a faster, more efficient payment and receive their funds in real time.”
Marijuana and the blockchain can mutually benefit from a partnership. This alliance would help both of the industries grow significantly across the country, as well as globally. Perhaps the slowness with which the government is moving will be the catalyst that leads to both advancing more than ever.