EDITOR’S NOTE: NJ Cannabis Insider is co-hosting a Cannabis Career Fair & Business Expo on Nov. 17 at Stockton University. Tickets here.
To get banking services for her cannabis delivery business, Precious Osage-Erese, chief operating officer of Roll Up Life in East Orange, said she has to drive two hours to the only financial institution that will help her.
That’s because most federally regulated banks don’t want anything to do with the budding cannabis industry, which while legal in New Jersey and other states remains illegal under federal law
“Imagine if I can go to my local bank and just do regular transactions,” Osage-Erese said Thursday on a Zoom conference call held by the U.S. Cannabis Council. “We just need a start.”
Osage-Erese was one of several minority cannabis business owners urging Congress to pass the Secure and Fair Enforcement, or SAFE, Banking Act, which would let banks offer credit cards, checking accounts and other financial services to legal weed businesses.
The House passed the bill in April and then in September included it in its version of the National Defense Authorization Act, which sets defense policy for the next 12 months. The Senate is working on its own version, and then negotiators for both houses will negotiate a final version.
Rep. Ed Perlmutter, D-Colo., the banking bill’s chief sponsor, urged that the banking provision be included in the final defense bill.
“By including the SAFE Banking Act in the final NDAA, we can safeguard our financial system, reduce the public safety risk in our communities, and help support veteran- and minority-owned businesses now,” Perlmutter said.
He said SAFE Banking was the one piece of cannabis legislation that had the best chance of becoming law in the current Congress.
“Enacting SAFE Banking is just the tip of the iceberg and it will help break the logjam and pave the way for broader, comprehensive cannabis reform and create a safer and more equitable industry,” Perlmutter said.
But standing in the way is U.S. Sen. Cory Booker. Though he is leading the fight in the chamber to end the federal ban on cannabis, Booker insists that it be done in combination with social justice provisions to help the individuals and communities ravaged by the war on drugs.
“I support SAFE Banking but that takes the pressure off of doing the restorative justice provisions,” Booker told NJ Cannabis Insider.
“We know that not only do a lot of community activists but also big bankers, powerful interests on Wall Street want that bill, but we need their help to make sure people who have nonviolent drug convictions, who can’t get jobs, can’t get business licenses, whose children are in poverty, we need their help to make sure the expungement provisions, the other restorative justice provisions that aren’t as popular with moneyed interests actually get done as well.”
But the absence of SAFE Banking is hindering another restorative justice provision — ensuring that people of color get a chance to own their own cannabis businesses.
“It also has posed a great barrier to entry for minority and entrepreneurs, who are faced with the inability to access basic financial services and the opportunity to grow their businesses that would come through basic bank loans,” said Steve Hawkins, chief executive of the U.S. Cannabis Council.
“We’re finding that smaller operators, operators of color, who would be dependent more on banking services as small business operators, are being denied and falling behind,” Hawkins said.
Without banks to make conventional loans, some minority-owned businesses are forced to hand over part-ownership to investors, while the large multistate operators they are competing with have no problem raising the money they need, said Leo Bridgewater, founder of BridgeH20 in Trenton and director of veterans outreach for Minorities for Medical Marijuana.
“Not having access to SAFE Banking is equivalent to having both of our hands tied behind our back,” Bridgewater said.
And Tiyahnn Bryant, founder and chief executive of Roll Up Life, Inc., said he understood Booker’s position. “He’s believing that people of color are going to be redlined again,” Bryant said.
But in terms of his own business, “I can attest to you that I need a bank,” he said.
“SAFE Banking is extremely necessary in the cannabis industry,” Bryant said. “It’s too dangerous to have all this cash sitting around.”
Indeed, forcing marijuana businesses to operate in cash makes them easy targets for criminals, he said.
James Bauer, manager of retail compliance and corporate security for LivWell, which has stores in Colorado and Michigan. He said criminals have crashed cars into his storefronts or broke in through their roofs, forcing the company to put barriers in front of its businesses and reinforce its walls.
“Some of those security measures I would expect to see when I was deployed in Afghanistan, not running a retail business,” Bauer said. “If you are in the cannabis industry, you will always be a target because we are primarily an all-cash business and criminals are well aware of that fact.”
This story first appeared in NJ Cannabis Insider.