Crypto is now lending a helping hand for the cannabis industry after congress abandoned them.
When organized mobs looted cannabis retail stores across the country in a wave of violent heists, the US Senate leadership refused to do anything to stop it. If Congress doesn't help, it's time for the cannabis industry to help itself. Cryptocurrency offers legal marijuana businesses a direct alternative to proprietary banking systems and cash-powered businesses. We have to accept it now.
The legal cannabis industry has grown exponentially over the past 25 years, but banking revenues, even from legitimate cannabis businesses, are still illegal under federal anti-money laundering (AML) laws. This effectively excludes the industry (and all the companies that supply it) from access to banking and financial services. The industry is grappling with the growing public security threat posed by forcing legal cannabis companies to leave banks and hold large sums of money. With each new state legalizing marijuana, the problem only escalates in scope and geography, while Congress is largely screwing its head.
While cannabis companies have always been aware of the threat of armed robbery, the violence perpetrated by those robberies has also become more organized and daring, often using well-armed and organized teams and too often ending in skirmishes.
Industry advocates (including cannabis entrepreneurs, cannabis workers, medical marijuana patients, drug policy reformers, etc.) have long focused our efforts on reforming banking laws by using MPs to pass Safe and Fair Enforcement (SAFE). Banking Law. The fellow members of the National Marijuana Industry Association travel on an annual pilgrimage to the Halls of Congress in Washington, D.C. to educate lawmakers on why access to banks is a public safety issue.
As it was explained to our members of Congress year after year during these visits, most government-licensed cannabis companies are banned from banking services and/or are suddenly and inadvertently banned from banking services upon receiving these services. As a result, these companies are in the unpleasant position of working primarily with cash, only accepting cash payments, and constantly storing, securing, and moving large amounts of cash on a daily basis – exposing their employees to armed robbery or worse.
But despite years of efforts to educate Congress, it has done little to mitigate this threat. It is disappointing to see that government-legalized companies (and their respective employees, customers and owners) live year after year under constant threat to their physical and financial well-being by avoiding risks to public safety. And sadly, last week, Congress abandoned its obligation to address this threat, ironically through legislation to finance our nation's defense.
In particular, the Senate leadership refused to include the language of the Safe Banking Act in the mandatory section of the National Defense Authorization Act – despite requests from their counterparts in the House of Representatives (which now use the bipartisan Safe Banking Act, in one form). or the other, often). With the stroke of a pen, the law would reduce the incentive to attack this core business by removing the money-rich honeypot from these businesses.
Calling this situation so discouraging doesn't begin to capture the feelings of hopelessness and frustration in the game, especially among already struggling marijuana dealers. When Congress refuses to help, it's time to help ourselves. As a defender of the industry, I think the time has come to accept the unthinkable sooner - the total and voluntary exclusion of banks as something to be achieved, not to be avoided.
This requires the industry (and especially the small minority and women-owned cannabis companies) to seek safe deposits, business loans, payment processing, and other basic financial services outside of traditional financial institutions. Cryptocurrencies offer the only direct alternative to doing all that money, and a convenient replacement for banks that still can't do legitimate marijuana business (and for those banks that choose not to even after a SAFE Banking Pass).
Cryptocurrencies have tremendous promise, not only for access to financial services through decentralized finance (DeFi). They have the opportunity to level the playing field between large and well-capitalized multi-country operators (MSOs) on the one hand, and small businesses (including women-owned and minority companies and social justice licensees) on the other.
Large MSOs are currently able to access banking under current FinCEN guidelines, which are highly restrictive and highly discriminatory and will pay excessive fees charged by banks to offset the costs of increased supervision required to comply with AML. Small businesses have access to these banking services on relatively comparable terms or with no access at all. In other words, while federal law remains unchanged, the largest banks and their MSO clients have the financial resources to make federal regulators look the other way at willful violations of the AML law — but everyone else is excluded.
While there is no intention of abandoning the SAFE Banking Act, it is heart-breaking to see marijuana advocates accused in Congress of repeatedly failing to protect public safety. It's no surprise, then, that cannabis companies are less afraid of being freed from the banking system (and associated financial oversight) and are increasingly frustrated just to allow future access to financial services through Congress. Cryptocurrencies are a viable alternative these days and this is when the cannabis industry helps introduce them.