The Long Island Association hosted a panel of cannabis and banking experts Thursday to discuss the industry’s financing challenges and support federal legislative solutions.
Organized by the LIA’s Financial Services and Tax Policy Committee, the panel focused on the obstacles presented by the illegal status of cannabis on the federal level, mainly that entrepreneurs operating in the Long Island market will not be able to bank or obtain financing from a federally insured institution.
“This dialogue is timely and important to have especially with New York set to open stores before the end of this year,” said Matt Cohen, LIA president and CEO. “We want to make sure companies interested in this emerging market have all of the information they need, and businesses leaders involved in this industry understand the obstacles current federal regulations pose to entrepreneurs.”
The banking situation creates other challenges for businesses beyond financial impracticality, including public safety and concerns that come with operating a cash-only business. There are proposals in Washington to address the issue, and until it is resolved cannabis companies will have to find alternatives to banking with federally insured institutions and will struggle with this issue.
The panel included Chef Ali of HiFive Edible Wonders Inc., a co-founder of The Cannabis Accountability Group; Linda Armyn, chief strategy and marketing officer for Bethpage Federal Credit Union; Brian Patrick Herrington, vice president of external affairs for Scotts Miracle-Gro; and Peter Su, senior vice president of Green Check Verified. The discussion was moderated by Maureen Evers-Willox, managing partner at KPMG LLP, and a co-vice chair of the LIA’s Financial Services and Tax Policy Committee.
“Because cannabis is still considered illegal at the federal level, there is a disconnect between federal and state law,” said Su, whose firm is a provider of cannabis banking solutions and advisory services for financial institutions. “This has a serious impact on business owners and workers who find themselves barred from capital and other banking services–they cannot operate safely, efficiently, nor successfully without any form of access to financial institutions.”
Proposed federal legislation called the SAFE Banking Act seeks to harmonize federal and state law by prohibiting federal regulators from taking punitive measures against depository institutions that provide banking services to legitimate cannabis-related businesses and ancillary businesses.
Small business caterer Chef Ali, who supports the proposed legislation, said it’s vital for any emerging industry to have a safe and sound foundation for success.
“Without laws in place like SAFE Banking, cannabis workers and entrepreneurs will continue to be limited economically, and safety-wise,” she said. “It shouldn’t be a privilege to be safe from violence and crime in your place of work, but should rather be the norm, no matter the industry you are employed in.”
Herrington agreed and urged action by the federal government.
“Congress is at a critical juncture and must act now on the SAFE Banking Act to positively affect the financial and physical safety of New York’s businesses, consumers, and workers,” he said.
David Winzelberg
Source link
