Yerock’s banking troubles didn’t stop at a mortgage. To clear her driveway of snow, she went to purchase a side-by-side utility vehicle and plow. The dealer, however, was unable to secure a loan for the vehicle due to her employment as a Six Sigma manager at Common Citizen.
Her wife, who does not work in cannabis, had to drive up to the dealer and apply for the loan.
Two other employees at Common Citizen were denied financial assistance for hearing aids through Michigan Rehabilitation Services, a state program that assists employees with disabilities, said Amanda McCrary, chief human resources officer for the company, said. MRS is regulated by the federal Workforce Innovation and Opportunity Act.
In an emailed letter to McCrary, MRS wrote it is prohibited from “supporting services or employment goals associated with growing, selling, producing, handling, or distributing marijuana in any form.”
“People working in the industry can’t benefit from these programs,” McCrary said. “People who work for us are disproportionately impacted by the federal government’s stance on cannabis.”
A change is on the horizon, though.
The U.S. Department of Health and Human Services recommended this week that the Drug Enforcement Agency move marijuana from a Schedule I to a Schedule III drug. Rescheduling the drug would immediately clear up marijuana business issues, such as ending the 280E tax, which prohibits marijuana sellers from writing off business expenses.
Rescheduling to a Schedule III, while not legalizing marijuana at the federal level, would also likely make it much easier for banks to enter the marijuana space for both businesses and employees.
“I don’t see a need for the SAFE Banking Act if this in fact becomes the official position,” Jonathan Havens, a cannabis attorney at Philadelphia-based Saul Ewing who previously worked for the FDA, told Politico Wednesday. “I’m not saying that all banks will want to jump into this space, but the need for safe harbors I don’t think exists like it does today.”
It’s unclear whether the DEA will move to reschedule marijuana and when. It’s also unclear whether rescheduling would impact federal assistance programs like the MRS hearing aid program.
Gov. Gretchen Whitmer has called for Congress to pass the SAFE Banking Act on several occasions. Employees at Common Citizen also met with Lt. Gov. Garlin Gilchrist II in August to discuss their banking problems. In addition, Common Citizen is working with the Michigan Chamber of Commerce to create a lobbying coalition in Washington D.C.
Another attempt to get the SAFE Banking Act passed is also afoot. Herndon said the bill is likely to move to a Senate committee in September.
Until then cannabis businesses and employees will be forced to use local banks and credit unions for financial services.
“We’ve all been taken advantage of,” said Morrow. “We’ve all had to pay five times the fees or a higher interest rate. Everyone in this industry has a story. It’s gone on for years. We’re just regular people trying to do regular business in a legal industry.”
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