Amazing things are happening in America. As our society slowly evolves into a place everyone can find themselves accustomed to, no matter the gender, race, religion, or whatever else, we strive to also create a good environment for business development.
The latest big thing happening in the US is the legalization of marijuana in some states and propositions about legalization in others. With the birth of the new industry in states like Colorado, California, Oregon, Washington D.C, and others, the market had to change to follow up on the new business opportunities.
The banking system is one of the branches facing obstacles when offering or accepting dealing with marijuana-based companies. Things had to change to improve the business climate and make perfect conditions for one of the youngest industries in the US.
Creating a path to a brighter future for everyone involved in the marijuana business was a steep mountain to climb. However, the latest SAFE Banking Act made that road a bit easier for banks and helped existing marijuana banking solutions. Here’s why.
Table of contents
The issue with marijuana banking
The marijuana industry is quite young in the US, and it’s experiencing never-ending growth ever since some states legalized recreational marijuana.
While observing such growth, financial institutions recognized an opportunity to invest their money into the new industry everyone’s talking about and help young businesses to boost their production to increase revenue.
Furthermore, things never looked so bright for banks and investment companies, but there was a problem. They faced the Federal Law that allows punishing everyone investing or providing services to anyone involved in the marijuana business.
Even though State Laws allow such services and investments in their jurisdiction, the Federal Law was always one ladder higher in the hierarchy. A roadblock of this magnitude slowed the progress of any business that couldn’t find a supporting financial institution that would handle their finances.
Only a handful of banks risked being penalized by the Federal Regulators. This made it tough for a marijuana-oriented business to find an institution that would accept such a possibility. While most banks avoid loaning money or making any money related to the industry, privately owned online banking solutions would gladly process any financial activity for these businesses.
These marijuana banking solutions offer transparent services and allow businesses to make any transaction as they would in a regular bank. Even though these solutions are still pioneers, their actions are pretty professional and offer a great alternative to conventional banking.
SAFE Banking Act
SAFE Banking Act, known as the Secure and Fair Enforcement Banking Act, is the latest bill passed in Congress that proposes allowing banks and other financial institutions to feel free to offer and accept their services to legal marijuana businesses.
The bill prohibits any penalization of banking institutions by terminating a deposit and shared insurance for banks that provide services to legit marijuana producers or vendors.
Additionally, the bill states that none of the transactions made with legal marijuana-focused businesses are no longer unlawful proceedings, giving banks much-needed relief when conducting their normal activities with legitimate and lawful clients.
Another encouraging thing about the SAFE Banking Act is that banks will no longer face any property or financial confiscations by the Federal Regulatory if they give out loans to lawfully registered marijuana-based businesses.
The SAFE Banking Act passed with a majority of the House voting 321-101 in favor of the act, and it’s now in the Senate’s hands for further discussion and approval.
Finally, there’s a bright light at the end of a tunnel, and we can expect a business growth of many small marijuana-based businesses formulated with the support of the banking system.
Online banking solution’s impact on our society
The marijuana industry earns astonishing revenue each year, generating huge tax incomes for the states and improving their unemployed index. We can all thank marijuana banking solutions for pawing the road to such a success.
With more job openings in states where marijuana-based businesses have considerable success selling their products, the life standard goes up, and the government has more funds to invest in making life better for everyone.
For example, Colorado made around $300 million in 2019 taxing marijuana businesses, which is a mind-blowing amount for such a young industry.
Furthermore, experts predict further legalization in other US states, expecting over a million new job openings until 2025. With the economy impacted by the ongoing global pandemic, such estimates shine as a bright beacon of hope for the American citizens.
Online banking solutions for marijuana-based companies are one of the leading figures of this story by supporting them when no one thought it’s possible. We should be grateful for their role in the process and support them even when all banks open their doors for everyone.
Conclusion
Marijuana banking solutions got the boost they were looking for, and now, we can expect more options due to the latest changes happening with the law.
The SAFE Banking Act is a new and powerful ally for everyone owning production or dispensaries in states with legalized marijuana and we can already see the diversification of the industry through stock investment. If you’re one of the entrepreneurs struggling to find proper marijuana banking solutions, you can expect great things to happen.
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