The past couple of years have been positive ones for cannabis. Dozens of states have legalized recreational and medical marijuana, granting millions of Americans access to a plant that had been outlawed for decades. Furthermore, the state-legal cannabis industry has been incredibly lucrative, generating billions of dollars in sales and creating hundreds and thousands of new employment opportunities.
Despite these successes, cannabis is still criminalized by federal law. Consequently, drug reform activists, industry stakeholders and some lawmakers have been championing federal legalization. Not only would this open the cannabis market even more, but it would also allow the country to start repairing the harms caused by the war on drugs.
Last week, news that lawmakers voted in favor of federal cannabis legislation in the House of Representatives, possibly legalizing cannabis at the federal level, set the industry abuzz. Federal legalization would significant benefits for consumers, businesses, states and even the federal government. However, analysts say there is a slim chance of federal cannabis legalization becoming a reality this year.
Cannabis banking, on the other hand, could pass in 2022. The director of policy research at BTIG Isaac Boltansky is confident that lawmakers will pass cannabis banking this year, stating that it could be attached to legislation such as the China competitiveness bill or the defense bill. It is more likely that we will see a banking bill with some research and restorative justice provisions pass, Boltansky said during an interview with Yahoo Finance Live.
A few days ago, the House of Representatives passed the Marijuana Opportunity Reinvestment and Expungement Act, however, as in 2020, the MORE Act will most likely stall in the Senate where the Democrats have a slim majority. The bill would legalize cannabis at the federal level and allow the cultivation, processing, sale and possession of cannabis products.
Furthermore, the MORE Act would include provisions for the expungement of previous nonviolent cannabis convictions. It would also impose a 5% tax on sales with a portion of the taxes being invested in mentoring, job training, legal aid, substance abuse and re-entry service programs.
The SAFE Banking Act of 2021, which would finally allow state-legal cannabis businesses to access financial services, has already been passed by the House six times. If it gets past the Senate this time, financial institutions such as banks will be able to transact with cannabis businesses without any reprisals from the federal government.
It would make the industry safer by eliminating cash payments and granting cannabis businesses access to a wider pool of capital. Rep Earl Perlmutter, who introduced the SAFE Banking Act, hopes the seventh try will be the charm.
When federal laws are reformed to allow cannabis businesses to access banking services, entities such as Red White & Bloom Brands Inc. (CSE: RWB) (OTCQX: RWBYF) will have fewer security headaches to grapple with since their customers will no longer be limited to cash payments.
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