Legislation Enables Service Providers to Participate in the Cannabis Industry
As the Cannabis industries become an anticipated part of the U.S. economy, Cannabis-related businesses have one less industry obstacle; accessing the U.S. banking system. Under a bill that passed the House earlier in May 2021, on a 321-101 vote, the House approved a bill sponsored by Rep. Ed Perlmutter, a Colorado Democrat, that would prohibit banking-system regulators from penalizing banks or credit unions that do business with a Cannabis-related business, its service providers, or state or local governments with jurisdiction over the businesses.
The bill would exempt cannabis business transactions from being considered proceeds from illegal activity and subject to anti-money-laundering laws. It also would prohibit banking regulators from terminating a customer account without a valid reason aside from reputation risk.
Potential cannabis industry participants have been concerned about the prohibition of having services providers as part of the business operations, most specifically, accountants, banks, funding institutions and lawyers who are apprehensive about the cannabis industry. The passage of the House bill [HP1] will incentivize the initiation of business plans and operating agreements in the cannabis industry.
As the interest in recreational cannabis grows and legislation is created and passed that directs the business operations, greater focus on the economic impact exists. Many areas are relying on the cannabis industry for a “re-birth”, suggesting money from legalized recreational marijuana sales could be directed to communities in need.
New Jersey Gov. Phil Murphy released a report from The Atlantic City Restart and Recovery Working Group, designed to provide a roadmap for the city to recover from the coronavirus pandemic. “The state should consider the opportunities that may be created by new initiatives, including the legalization of recreational use marijuana, as potential sources of political and financial support for the efforts to restart and recover Atlantic City,” the report said; making the city’s economy less reliant on the casino industry, supporting renovation of the downtown area and providing for youth activities. The report provided potential programs that would assist Atlantic City’s residents, suggesting things like an early pregnancy outreach program and increasing services to treat drug abuse and poor nutrition, among other challenges and called for creation of new residential neighborhoods.
The Cannabis Regulatory Committee (of New Jersey) will initiate the application process for the recreational cannabis use businesses soon requiring hopeful licensees to initiate their business plans.
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