Cannabis sales are legal in 40 states and the District of Columbia, and the list is growing. But legally licensed cannabis dispensaries are sitting ducks for robberies and violence because federal law makes them predominantly cash-only businesses. They do not have full use of the U.S. banking system, which means they have limited access to credit or even credit cards as do other businesses.
That needs to change. It’s great news that President Biden has finally moved to address some of the racial wrongs of our nation’s failed war on cannabis. To keep progress moving forward, the U.S. Congress should pass the SAFE Banking Act this year to make cannabis sales safer by making dispensaries less cash-heavy.
I opened Anacostia Organics in Washington, D.C., three years ago in one of our city’s most economically challenged communities. When I opened the dispensary, I looked forward to helping my many neighbors and friends who needed cannabis for medical reasons — including seniors, veterans, and people with disabilities. I had no idea that cannabis presented a minefield of challenges.
Finding and leasing viable space was an ordeal. Licensing fees were exorbitant. Paying the high cost of insurance made operating almost unsustainable. My own credit was impacted. Grants and SBA loans are not accessible to cannabis businesses. I couldn’t even use the equity in my Anacostia residence.
The threat of crime is also a problem. This year alone, Anacostia Organics had two robbery attempts. Cannabis stores across the country are prime targets. A deadly shooting in Los Angeles County is one of the latest incidents. Dispensary robberies are commonplace. Organized caravans of armed thieves have literally marauded cannabis businesses.
The U.S. Senate, which is located a short distance from my dispensary, is debating cannabis legislation. I agree with lawmakers such as Sen. Cory Booker (D-NJ) who believe the lack of equity and diversity in the cannabis industry is a big problem. Like him, I support reforming the system to open the door of opportunity for those unjustly incarcerated or weighed down by criminal records.
But along with those changes, the Senate should give cannabis companies complete access to commercial bank services. The cash-heavy requirements in the business today are unsustainable and outmoded.
That’s where the SAFE Banking Act comes in. As states continue to take the lead in legalizing medical and adult-use cannabis without waiting for the federal government, local banks and cannabis startups find themselves caught between state and federal regulatory regimes. SAFE Banking wouldn’t legalize cannabis at the federal level, but it would end the industry’s cash-heavy predicament.
New federal banking rules would provide uniform guidelines for cannabis-related business accounts. Depository institutions would be legally protected from civil and criminal sanctions for providing financial services. This would go a long way toward helping cannabis firms improve their credit ratings and qualify for loans.
Sen. Booker said at a recent Senate Judiciary Committee hearing that he was optimistic the right balance can be achieved when it comes to combining banking reforms and financial fixes for the cannabis industry with needed equity and justice-related policy changes. We can no longer wait for action on both fronts.
The U.S. House of Representatives has passed the SAFE Banking Act seven times. It is now the Senate’s turn to act. Sen. Booker has offered a vision and solution to achieving a more diverse, equitable, safer approach to developing an entrepreneurial-focused cannabis industry. I urge the Senate to pass the SAFE Banking Act this year.
Linda Mercado Greene is owner and CEO of Anacostia Organics, a minority woman-owned medical cannabis dispensary in the District of Columbia. She chairs the D.C. Cannabis Trade Association, serves on the Board of the U.S. Cannabis Council and chairs the DEI Task Force.