The cannabis industry is facing a period of unprecedented change - so much so that it can be easy to lose track of the most recent developments. Here are our top three stories from last week.
Senate Committee Votes to Give Cannabis Businesses Access to Federal Banks
On July 23, the Senate Appropriations Committee approved an amendment to allow cannabis businesses access to federal banking services, a landmark shift that will help states like Colorado, Washington and Oregon develop safer, more transparent, and more efficient industries.
Three Republicans on the Senate panel — Lisa Murkowski (Alaska), Bill Cassidy (Louisiana), and Steve Daines (Montana) — voted for the amendment. California Senator Dianne Feinstein was the only Democrat on the panel to oppose it.
It is difficult to predict what effects the decision will have on the financial sector, which remains apprehensive about accepting money from cannabis sales. However, it suggests that the growing support for cannabis legalization among the American public may finally be strong enough to incentivize Congress to take action on the idea.
New York Grants Five Medical Marijuana Licenses
The State Health Department on Friday announced that five companies will be allowed to cultivate and sell medical marijuana in New York, including in New York City. Although Governor Andrew Cuomo declined to comment on the decision, Health Commissioner Howard Zucker called it a “major milestone” in the state’s medical marijuana program.
The five companies awarded licenses include Etain, which sells its products in Albany, Yonkers, Syracuse and Kingston. Bloomfield Industries, PharmaCannis, and Empire State Health solutions will each operate in the various boroughs in New York City as well as in the surrounding suburbs. The final one, Columbia Care, plans to expand its cultivation facilities and operate dispensaries in both Rochester and Manhattan.
This means that medical marijuana could begin selling in New York by the end of the year. All cannabis must be cultivated in-state and all sales will be subject to a 7% sales tax.
Federal Reserve Rejects “Master Account” Application for Denver Credit Union
Despite the Senate Appropriation Committee’s decision only a week prior (see above), Denver’s Fourth Corner Credit Union, whose aim is to be the first financial institutions to exclusively service the cannabis and hemp industries, announced last Thursday that the Federal Reserve had rejected its application for a master account. In response, the credit union filed a federal lawsuit against the Fed, demanding fair access to the financial sector.
Very few banks have shown a willingness to open accounts for the hundreds of marijuana businesses in Colorado, leaving business owners no choice but to operate on an all-cash basis. Many are forced to divert huge percentages of revenues to security measures such as safes, armored cars, state-of-the-art security systems, and private security contractors.
The New York Times recently released a very illustrative video on the challenges and dangers that business owners face by operating entirely in cash.