In an interview with PBC conference, Rodney Hood, a financial regulator and board member National Credit Union Administration (“NCUA”), said that the marijuana sector has a bright future once it is fully legalized and infrastructure is set in place. During the interview, Hood suggested ways to deal with federal regulations that have seen banking institutions backing out on working with marijuana businesses.
Despite more states legalizing marijuana for recreational and medical use, the industry has not received backing from the financial services sector. This reluctance is due to the influence of federal prohibition on the sector.
Aside from that, rural markets provide an opportunity for cannabis businesses. With urban centers usually considered as the prime target market, rural communities get overlooked. That could change if Congress passes reform legislation that protects banks that work with cannabis businesses from facing penalties as a result of financial regulations.
The Secure and Fair Enforcement Banking Act, also referred to as SAFE Banking Act, is seen by many as a way to improve business efficiency in the cannabis industry with its intention of availing protected banking services. The bill is currently in the Senate after being cleared by the House five times in different forms. The bill is authored and sponsored by Democratic Congressman Ed Perlmutter who has said that he is irritated with its stalling despite both chambers of Congress having a Democratic majority. He said that when he retires from Congress at the end of this session, he will make sure that the bill has been passed.
Hood shares a similar stance, hoping that the bill gets passed soon. In the meantime, he says that credit unions and mainline banks should be ready to embrace the marijuana industry. With 38 states having legalized the use, the banking industry needs to be postured and prepared for what cannabis-related businesses are ready to offer.
A recent paper revealed that there was an increase in banking activities in states where marijuana is legal. A report released by the Financial Crimes Enforcement Network (FinCEN) last year revealed more banks are willing to work with cannabis businesses. The number of banking institutions serving marijuana clients went from 689 in the previous quarter to 706.
As for the SAFE Banking Act, a bipartisan coalition made up of two dozen governors is calling for Congress to enact it through the defense legislation, National Defense Authorization Act (“NDAA”).
When marijuana policy reforms are finally implemented at the federal level, the entire cannabis sector, including entities such as Cannabis Strategic Ventures Inc. (OTC: NUGS), will have fewer hoops to jump through in their daily operations.
NOTE TO INVESTORS: The latest news and updates relating to Cannabis Strategic Ventures Inc. (OTC: NUGS) are available in the company’s newsroom at http://cnw.fm/NUGS
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