It’s been more than two months since the COVID-19 outbreak swept the country and the economic destruction has reached a level we’ve never seen. Overall, the U.S. unemployment rate is nearing 15-percent, which rivals the levels seen during the Great Depression, and there’s still no end in sight.
The Utah Department of Workforce Services reported on their website that 106,377 weekly unemployment claims were filed the first week of May, paying out $27.8 million to struggling locals.
In order to help the ailing country, Congress passed the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, which took effect on March 27.
The $2.2 trillion CARES Act provides nearly $350 billion for small business loans, $500 billion for distressed industries, and almost $260 billion for a four-month expansion of the unemployment benefits program that has now paid out over $50 million to unemployed Utahans.
$300 billion of the CARES Act fund were directed towards stimulus payouts, which presented as a $1,200 check for those making less than $75,000 annually.
Last week, the House of Representatives passed an additional $3 trillion coronavirus relief package bill, which would provide another round of stimulus checks to Americans and extend unemployment benefits. Other provisions of the bill involve cannabis and hemp businesses.
The Health and Economic Recovery Omnibus Emergency Solutions, or HEROES Act could provide additional economic relief for almost 37 million Americans who have lost their jobs, or are facing reduced working hours. The Senate will cast their vote tomorrow.
Although putting money into the bank accounts of struggling Americans is the purpose of the HEROES Act, a deeper look into the over 1,800-page bill unveils a cannabis banking reform legislation that has many local hemp and CBD business owners stirring.
Cannabis banking reform isn’t a new concept; many of those working in the cannabis and hemp industry have been waiting for an opportunity for the Secure and Fair Enforcement (SAFE) Banking Act, which was proposed for this purpose, to advance to the Senate’s agenda since the bill was voted through the House in September of 2019.
“The House passed the bill last year with surprising support and the Senate has never taken action on it. It is my understanding that there have been some more conservative republican senators that haven’t let the bill on the agenda,” Rich Oborn, Director of the Center for Medical Cannabis at the Utah Department of Health, said during an interview with Salt Baked City.
As the name eludes, the SAFE Banking Act, which was voted in by the House by a landslide (321 yea votes to 103 nay), will provide permanent protections to financial institutions that want to offer basic banking services to cannabis businesses. This will allow those usually restricted from these services access to safe and reliable checking accounts, lines of credit, and many other benefits that conventional businesses already have access to.
Now that cannabis legalization is sweeping the country – 11 states plus Washington D.C., have all legalized recreational cannabis, while 34 states have followed suit with legalizing medical cannabis. This leaves only 17 states that still consider it illegal.
Although, some banks and credit unions around the country already allow financial services for those in the industry cannabis still remains a Schedule I substance by the feds and puts financial institutions at risk of criminal or financial penalties by offering services to these types of businesses.
“I think this is a critical component of the entire industry that I’m excited to have change,” Oborn said. “Reform will allow local industry to conduct business much easier and keep us from feeling like we’re doing shady cash business when we’re buying products that states have determined legal under state law.”
In addition to having access to financial services, cannabis businesses will also be eligible for COVID-19 financial relief.
Unfortunately, despite waiting for this opportunity for a year, and struggling along with the rest of their business peers, chances are that the cannabis industry’s wait for banking reform will continue.
While attractive to cannabis entrepreneurs, the HEROES Act contains numerous provisions that the Republican-led Senate are unlikely to agree with, including the banking provisions.
These provisions are subject to negotiation and possible removal before the Act is agreed upon and passed by the Senate. This makes it likely that the fight for the SAFE Banking Act will continue past this current battle.
Reach out to your Utah Senators here to voice your opinion on the need for fair cannabis industry banking.
