Congressional Democrats are working on a bill that would provide quite a few business and banking benefits to cannabis-related companies.
The document – authored by Representatives Ed Perlmutter (D-CO), Danny Heck (D-WA), Steve Stivers (R-OH), and Warren Davidson (R-OH) – was released last week by the House Financial Services Committee. This bill contains several new provisions that haven’t been previously mentioned in past bills related to cannabis financial services.
For starters, it discusses the rights of ancillary business to open and keep accounts with financial institutions. These are secondary businesses that provide products and services to businesses within the cannabis / CBD industry; for example, hydroponics stores, cannabis business accountants, and even plumbers, electricians, and handymen working with industry professionals. It also outlines a series of protections for cannabis-related stock exchange accounts and retirement plans. Furthermore, it allows companies and individuals to provide real estate, land, and other types of property to cannabis industry businesses.
“Maintaining a checking account or utiliz[ing] payment processors can prove challenging even for businesses that don’t directly handle cannabis,” stated a memo prepared by the committee says. “For example, in early 2017, dozens of companies selling ancillary products and services to cannabis-related businesses were unexpectedly purged and lost access to major payment processors, like PayPal and Square.”
The bill also clearly specifies that “proceeds from a transaction conducted by a cannabis-related legitimate business shall not be considered as proceeds from an unlawful activity solely because the transaction was conducted by a cannabis-related legitimate business.”
Another new caveat in the bill that hasn’t been previously discussed is the rights of tribal banks and lenders who are providing accounts and loans to cannabis businesses. These financial institutions are regulated by Native American tribes and are typically not subject to the same regulations as other institutions, however, they did often have to deal with unwanted consequences due to federal cannabis laws. With this bill, they would be offered specific protections.
Ultimately, the goal of this new proposal is to offer fair and uniform guidelines for what is and isn’t allowed as to eliminate the confusion and difficulties that cannabis entrepreneurs often face when trying to get their businesses off the ground.
All the details will be discussed at a scheduled congressional hearing today (February 13th), so check back with us for more updates on this developing story. Also, make sure to subscribe to our Weekly Newsletter for all the latest news and information.