Scroll Top

Groups Push Senators To Add Marijuana Business Stock Exchange Access To Banking Bill

A coalition of marijuana advocacy groups is asking that a bipartisan marijuana banking bill be expanded to include provisions ensuring that cannabis businesses have access to all forms of financial services—including the ability to be listed on senior U.S. stock exchanges.

In a letter sent to Senate Banking Committee leadership on Thursday, the coalition SAFE Banking for Equity said that it appreciates that the panel is “treating this issue with the urgency it demands” by holding a hearing focused on cannabis industry financial barriers last week.

But the groups—which include California Minority Alliance, Minorities for Medical Marijuana, Women Grow and National Hispanic Cannabis Council—also said that it was important that the standalone Secure and Fair Enforcement (SAFE) Banking Act be amended in a fairly significant way that may be a bridge too far for certain advocates focused on comprehensive legalization.

As it stands, the SAFE Banking Act would protect banks that work with state-licensed marijuana businesses and certain depository institutions from being penalized by federal regulators.

What the coalition is asking for is a broader safety net that would free up industry access to “all regulated financial institutions and services, including depository services, lenders, debt and equity financing, capital markets and investment services, insurance, broker dealers, fiduciaries, and credit card and payment processing.”

“Providing the state-legal cannabis industry equal access to financial institutions and resources is key for economic growth,” the letter says. “Without broader access to financial institutions, many entrepreneurs are left without anywhere to turn to secure the funding needed to launch their company or to expand existing operations.”

The groups wrote that limiting cannabis industry financial services access forces operators “to fight for survival against the illicit market—including Chinese-backed investors—with both hands tied behind their backs.”

“If small and minority-owned cannabis companies do not have the capital needed to compete or stay afloat, the state regulated cannabis market will be ceded to criminal enterprises that do not adhere to stringent testing or labeling standards, that do not institute child resistant packaging or care about age limitations, and that do not pay taxes or invest back in their communities. Ultimately, an unchecked illicit market would be catastrophic to legal, regulated businesses, and compromise public health and safety.”

They further asserted that access to U.S. senior exchanges, as opposed to junior exchanges, would “significantly” increase the valuations of small marijuana businesses, “resulting in a dramatic decrease in the amount of equity an entrepreneur would have to cede to get the same investment.”

“Maintaining equity is critical for those operators who hold social equity licenses that require them to maintain majority ownership of their company,” the letter says. “Without access to meaningful capital to convert these social equity licenses or for minority operators to succeed, the states’ efforts to support a more equitable industry are merely checking a box and allowing for small businesses to be shut out while the illicit market profits in the void.”

There was a bill that was filed by Reps. Troy Carter (D-LA) and Guy Reschenthaler (R-PA) last Congress that would have allowed cannabis businesses to be listed on national stock exchanges and access other key financial services, but it did not advance.