Legal marijuana sales brought in $5.4 billion in 2015 and that number is projected to jump to $21.8 billion by 2020. Despite the wave of states embracing the legalization of medical and recreational marijuana, it remains illegal under federal law. Operating a business in the marijuana industry means navigating a complex regulatory landscape and understanding how to take full advantage of your financial options.
If you are an entrepreneur in the cannabis industry or encountering difficulties in your existing marijuana business, McElfresh Law can help. A San Diego cannabis business lawyer can explain your rights and offer guidance on the patchwork of state and local regulations so that you can operate your business in a profitable and lawful manner. Call us today at (858) 756-7107.
Cannabis Businesses Have Limited Options When It Comes to Banking
Because of current federal regulations, banks have been reluctant to take on the risks that are associated with accepting money from legal cannabis businesses. Practically speaking, this means that a good deal of the legal cannabis industry in California and across the country operate as cash-only businesses.
In fact, a recent survey by Marijuana Business Daily revealed that 70 percent of cannabis businesses nationwide do not use conventional banking services. However, a newly introduced bill, the Secure and Fair Enforcement Banking Act (SAFE Banking Act), is hoping to change that by allowing banks to provide financial services to cannabis businesses without fear of prosecution from the federal government.
What is the SAFE Banking Act?
On April 27, 2017, Congressman Ed Perlmutter of Colorado along with co-sponsors from the states of Washington and Alaska, introduced the SAFE Banking Act (114 HR 2076). The bill will provide a safe harbor for banks that provide financial services to legitimate marijuana-related businesses (MRBs) in states that allow the cultivation, sale, transportation, distribution, or purchase of cannabis.
If passed, the legislation would prohibit federal banking regulators from:
- Terminating or limiting deposit or share insurance simply because it provides financial services to an MRB
- Penalizing or discouraging banks from offering financial services to MRBs
- Recommending, encouraging, or otherwise incentivizing a bank to refuse, downgrade, or cancel the services offered to an individual simply because they are an owner, manufacturer, producer, or operator of an MRB
- Taking adverse action solely because the account holder or business involved is an MRB or leases equipment or real estate to an MRB
In addition, banks, its officers, directors, and employees are immune from federal criminal prosecution solely for providing financial services to legitimate MRBs. The legislation is similar to the Marijuana Businesses Access to Banking Act, which was introduced in 2013 and 2015, but ultimately did not become law.
However, proponents of the SAFE Banking Act are more hopeful this time around given that 29 states and two U.S. territories have legalized the use of medical or recreational marijuana since the bill’s predecessor was initially introduced four years ago. If the bill passes, it would make banking much easier for cannabis businesses and go a long way in reducing the risk of crime that accompanies cash-only operations.
Contact a San Diego Cannabis Business Lawyer Today
California’s marijuana law has undergone significant changes recently. Not only is it important that your cannabis business comply with ever-evolving regulations, you must also know how to deal with high-volume cash flow. Work with an experienced cannabis attorney is the best way to help make sure your marijuana business is safe and profitable.
At McElfresh Law, we have been successfully representing marijuana businesses for years and we understand the challenges the cannabis industry can impose on both entrepreneurs and patients. Find out how McElfresh Law can help your marijuana business by calling us today at (858) 756-7107.
Free consultation for criminal defense cases only. A fee is required for medical marijuana business consultations.