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Pennsylvania just passed a law that offers protections to insurers and banks that want to work with state-legal medical cannabis companies.
The new law allows any insurance company or financial institution to legally provide their services “to or for the benefit of a legitimate cannabis-related business and the business associates of a legitimate cannabis-related business.” State government agencies will no longer be able to prohibit or penalize banks or insurers who work with legal weed companies, nor can they take “adverse or corrective supervisory action on a loan made to a legitimate cannabis-related business.”
Lawmakers are hoping that the legislation will help encourage banks and insurers to start doing business with the state's licensed medical cannabis providers. But despite these new protections, the law is unlikely to convince too many businesses to take that risk. The US government still prohibits financial institutions and insurers from working with companies that deal with Schedule I drugs, and Pennsylvania doesn't have the legal authority to shield these businesses from federal law enforcement.
For this reason, the state will still give financial institutions and insurance companies the right to deny services to weed businesses. And without federal protections in place, most of these corporations will probably choose to play it safe. But even as a stopgap measure, the legislation still offers assurances that Pennsylvania's medical cannabis industry is ready to do business as soon as Congress gets around to resolving America's outdated prohibition laws.
Pro-cannabis Congressmembers have actually been trying to enshrine cannabis banking protections into federal law for nearly a decade now. A bipartisan coalition of lawmakers have been pushing hard for the SAFE Banking Act, a bill that would officially allow insurers and banks to do business with state-legal cannabis companies. The House has passed this legislation six times now, either as a standalone bill or an amendment to a larger budget bill, but the Senate has struck it down every single time.
The ongoing ban on banking services is making life miserable for cannabis companies all across America. Without access to bank accounts or payment processing services, cannabis dispensaries must conduct all transactions and pay their taxes in cash. Now that criminals (and cops) know that most dispensaries have huge stacks of cash on hand, weed store robberies are becoming commonplace. And without access to insurance or loans, smaller businesses are struggling to recover from burglaries and climate change disasters.
There is still some hope for the SAFE Banking Act, though. Senate Majority Leader Chuck Schumer (D) has blocked the bill's passage so far, in hopes that Congress will instead adopt his bill to legalize cannabis at the federal level. President Biden remains opposed to legalization, though, so House leaders are trying to convince Schumer to adopt this incremental reform instead. Representatives are now working to add the SAFE Banking language to a federal defense bill, in hopes that it will finally pass the Senate.