Many legal cannabis companies are forced to run cash only, making them vulnerable to break-ins, robbery, and violent crime.
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June 22, 2021 4 minutes to read
The opinions of entrepreneurs’ contributors are their own.
Although most states legalize cannabis in some form, it is still federally illegal. So many banks, credit unions, and lenders are refusing to do business with licensed cannabis companies for fear of federal retaliation.
In response, lawmakers introduced the SAFE Banking Act as a bipartisan law that would prevent state banking regulators from interfering with a financial institution’s ability to do business with herbal cannabis companies and subsidiary brands that serve the industry. Legislators have tried to pass different versions of the SAFE Banking Act in recent years. In April 2021, the latest version was passed in parliament with overwhelming bipartisan support. It is now waiting to be passed in the Senate before being put into effect by President Biden.
But until the SAFE Banking Act goes into effect, many cannabis companies and their employees cannot readily access banking services and rely on cash, exposing them to a wide variety of criminal offenses.
Related: The marijuana banking law is coming under more pressure from political figures
Small businesses are the most vulnerable
While large multi-state operators (MSOs) and other large players can afford heavy security measures, such as B. Armored vans for carrying cash and armed guards to protect their shops; smaller businesses cannot afford the same protection. Without access to traditional business credit, some retailers have no way of recovering from the damage caused by break-ins and robberies.
Even if a pharmacy has bank details, they still can’t accept credit or debit cards as payment, forcing them to only accept cash. Coupled with the fact that bad actors can sell their products at much higher prices in the illegal market in non-constitutional states, pharmacies are an easy and obvious target.
Targets of violence
The rise in incidents of violence has led to further discussions about whether pot shops should allow their employees to carry weapons. Proponents of this additional level of protection cite the daily threats to which employees in the pharmacy are exposed.
Cameron Smith, a budtender at Lucid Cannabis in Cheney, Washington, was shot dead by a customer when Smith refused to serve him for improper identification – a requirement for buying legal cannabis.
In another incident in late 2020, Michael Arthur, a budtender employed by Cured Green, a legal marijuana dispensary with a single location in Oregon, was murdered by armed intruders. His death came amid a series of armed robberies of cannabis dispensaries in Portland. Since the pandemic began, Portland pharmacies have been robbed about two times a week, and the United States has countless more robberies every week.
Earlier this year, an alleged armed robber was shot dead by a budtender at the Higher Choice pharmacy in Oklahoma. Had the employee not been armed, his story, like many others before him, could have ended tragically. However, federal law prohibits cannabis patients from buying or owning firearms – another barrier that allows retailers to protect their employees and their business.
These are just a few examples of the crimes US cannabis companies must solve in order to find solutions – without the additional or even the same resources that legal non-industry companies use on a daily basis. Colorado, one of the first states to legalize recreational grass, generated $ 32,383,094 in tax and fee income in 2020 alone, but the states still don’t protect these workers.
Access to banking can help
A simple solution to this enormous public safety risk would be to give marijuana companies access to banking services like any other legal, reputable company through the passage of the SAFE Banking Act. Until then, cannabis companies will have to find alternative options. Contrary to popular belief, many banks will offer services to the industry – 515 of the 8,200 federally registered banks and 169 credit unions were offering banking services to marijuana companies at the end of 2020.
Some side businesses, like Wurk, can help make banking and money easier for cannabis companies by allowing them to pay their employees direct deposit instead of sending them home with cash. Another added benefit: companies can pay their wage taxes electronically, avoiding the additional costs associated with paying cash to the tax authorities, such as B. renting an armored vehicle to transport money. Partnering with a compliance provider like Wurk is critical for businesses lucky enough to have access to banking services while they wait for the Safe Banking Act to be passed.