The lack of banking services for cannabis businesses is a national embarrassment at this point. The cannabis industry has been deemed essential during the COVID pandemic, supporting jobs and generating record-breaking tax revenues each and every quarter. Billions upon billions of dollars are flowing into retailers’ cash registers, but all too often, state-regulated companies are without bank accounts or are forced to jump through unnecessary regulatory hurdles and pay arbitrary fees just for the “privilege” of keeping an account.
The cannabis companies’ inability to maintain bank accounts impacts all of the other vendors and businesses that the industry must interact with, creating inefficiencies that shouldn’t exist. People associated with the cannabis industry, such as lawyers, consultants, and property managers have lost bank accounts as well. On top of the burdens and extra costs, the prohibition on banking creates a danger, including for state and federal workers who have to handle the ever-increasing mounds of cash that are used to pay local, state, and federal taxes.
Internal Revenue Service (IRS) Commissioner Charles Rettig testified before the House Appropriations Financial Services and General Government Subcommittee, detailing how his agency would prefer that state-legal cannabis businesses had access to banking services that would allow electronic deposits, as Marijuana Moment reported:
Rep. David Joyce (R-OH), who serves as a co-chair of the Congressional Cannabis Caucus, said that barring marijuana companies from traditional financial services is “inefficient for business and the IRS alike, obviously, not to mention ample opportunity for fraud and abuse it creates, as well as potential for criminal acts as far as robbing and stealing from those.”
Rettig replied that “the IRS would prefer direct deposits moreso than receiving actual cash payments.”
“It’s a security issue for the IRS. It’s a security issue for our employees in our taxpayer assistance centers, [which] is actually where we receive these payments,” he said. “We created special facilities in the tax to receive the payments. Then we similarly have to transport the payments themselves.”
Reefer Madness prohibition policies have hurt too many people for far too long, even years after states have passed legalization laws and 2/3 of Americans support ending cannabis prohibition. Prohibitionists that claim they support public safety and health are actually endangering more people. Our nation claims to support entrepreneurship and small businesses, but federal prohibition is stifling hard-working Americans and strangling mom-and-pops while multinational corporations with deep pockets can ride out these regulatory obstacles while buying up the little guys. It’s a small miracle that locally-owned craft cannabis boutiques like Kind Leaf are able to survive and even thrive under these circumstances. It’s past time that Uncle Sam legalize cannabis, but let’s at least get the SAFE Banking Act signed into law on our march towards freedom and equality.