Utahns legalized medical marijuana via ballot initiative in 2018. Less than two years later, the first medical marijuana dispensary opened and more locations are planned to open statewide. In the years since the first states began legalizing marijuana, the industry has grown rapidly, but it continues to be a mostly cash-only business model. Because marijuana is federally recognized as a Schedule I drug, banks and credit unions fear potential legal action for doing business with both medical and recreational dispensaries. This cash-only system needs to end. It puts consumers and employees at risk, creates challenges for business owners and it isn’t sustainable long-term. Congress must pass the bipartisan SAFE Banking Act, which would allow “legitimate marijuana or hemp-related business” to access banking services.

Unsafe for Business and the Public

Utah’s Republican Attorney General Sean Reyes sided with 34 other attorneys general in asking Congress to give medical cannabis businesses access to the federal banking system. Reyes cites the COVID-19 pandemic as one of the reasons to allow access to the federal banking system since the cash-only model puts multiple parties in the industry at risk. Many businesses have moved to accepting electronic forms of payment instead of cash since the beginning of the pandemic to minimize the spread of germs. Being a cash-only essential business puts consumers, patients and employees at a higher risk of contracting COVID-19 through person-to-person interaction.

Utah’s State Treasurer, David Damschen, also supports the SAFE Banking Act, saying, “We need the federal government to respect the move among states toward varying degrees of legalization and to better harmonize its laws regarding cannabis-related activities.” While cannabis laws differ from state-to-state, smoothing over legal discrepancies is essential to ensuring better business practices for both sellers and consumers. In the midst of a pandemic, it is even more pressing for these businesses to be able to use electronic forms of payment to protect their workers and their customers.

Utah Rep. Ben McAdams, a member of the House Financial Services Committee, pushed for the SAFE Banking Act to be passed, citing that 34 states have some form of statewide marijuana legalization in place. McAdams also noted that a lack of access to banking makes dispensaries more likely to be targeted for crime, a point proven by a string of recent robberies. Forty-three dispensaries along the West Coast were robbed in highly organized operations, with one Oakland cultivation facility estimating a loss of around $2 million — the equivalent of 900 pounds of cannabis product. Current practices leave these legitimate businesses as easy targets and as a result, business owners are always operating with an abnormally high risk of losing profit.

Public Opinion Supports Legalization

A poll from November of 2019 showed that 67% of the American public supports legalizing marijuana nationally, with 55% of Republicans and 78% of Democrats supportive of legalization. It is only a matter of time before more states join the other 34 states who have already done so. Sixteen states are set to have some form of marijuana legislation on their 2020 ballots. Since the United States is already on a path to legalization, it would be wise to prepare legislation to allow these businesses to quickly open and become operational.

While presidential candidates Joe Biden and Donald Trump both oppose federal legislation of marijuana, Biden’s pick for Vice President, Kamala Harris, is an indicator that federal legalization would be more likely under a Biden administration. In contrast to her time as California Attorney General, Harris supported federal legalization of marijuana during her 2020 run for the Presidency. Harris is also the Senate sponsor of the MORE Act to legalize marijuana, which is going to the House floor for a vote this month. In light of all of these developments, it is clearly time to begin the process of updating federal systems to allow these businesses to operate like any other.

Marijuana dispensaries, both medical and recreational, deserve to have access to the federal banking system to run their business. It is obvious these shops are here to stay, and the industry will only continue to grow. By passing the SAFE Act and granting access to the federal banking system, Congress can protect the financial and physical well-being of business owners, employees, consumers and patients during this pandemic.

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@theisaacreese