Proposed legislation would allow cannabis businesses to use banks
The SAFE Banking Act passed by the house, moves to senate
MIAMI, Oka. – If you have a medical marijuana card and want to go to your favorite dispensary, you better take some green with you. Credit and debit cards aren’t allowed.
“All the cannabis transactions are in cash,” says Lamont Laird, co-owner of The Flying Pig Dispensary in Miami.
The shop has been opened since April 2019, not quite a year after medical marijuana was legalized in the state of Oklahoma in 2018. Lair has seen an increase in business since the COVID-19 pandemic started, but since cannabis is illegal at the federal level, classified a Schedule 1 drug by the Controlled Substance Act, he has to do everything with cash.
“Anything that has to do with the federal government, it’s still considered an illegal activity. So that includes banking,” says Laird.
That includes payroll for employees and paying a more than 80 percent tax rate, between local, state and federal taxes.
“It’s kind of tough to take your bag of money to your local tax office and settle up,” says Laird. “The state of Oklahoma has designated one bank in the state that accepts tax payments. Our closest branch is in Grove. So we dutifully, once a month, walk in our tax payment.”
Jason Elsasser has been in the cannabis industry since 2006, starting in California, and moving back to Oklahoma where he grew up to open the Classy Grass Boutique in Miami.
He is able to use a local bank for things like payroll and making deposits, but he still can’t do electronic transactions.
“Having all that cash laying around creates a risk,” says Elsasser. “Then, when you’re not able to bank, write payroll checks, pay your taxes, then it’s very challenging.”
And Brian Hallum, the owner of Higher Health Dispensary in Grove, says he is charged between $1000 and $2500 a month to have an account.
But a bill that was included in the most recent round of coronavirus relief could change that.
The Secure and Fair Enforcement (SAFE) Banking Act would, in part, prevent penalties for banking institutions that choose to work with cannabis businesses.
The bill was first passed by the U.S. House in September 2019, but has been in the Senate Committee on Banking, Housing, and Urban Affairs since.
It was recently included in the three trillion dollar HEROES Act, with the intent of reducing the number of cash transactions to prevent the spread of COVID-19.
“We’ve been dealing with problems with banking since I first got into this business. And it’s not anything localized to Oklahoma,” says Elsasser. “This is something that any cannabis business in the United States has to deal with. And it’s long overdue.”
The HEROES Act was passed by the U.S. House on May 15th, and now moves to the U.S. Senate.
Local owners hope it will be passed sooner rather than later. They would also like to see more strides toward the decriminalization of marijuana.
“[Would] the safe banking act help? Sure,” says Hallum. “Things will not get better for the medical marijuana industry until the federal government acknowledges its health benefits and changes its schedule one classification.”
33 states have some form of legalized marijuana, according to the National Conference of State Legislatures.