Even though one analysis says California has the world’s largest legal marijuana market, cash is still king for Golden State cannabis.
But perhaps not for long.
“It’s huge, it’s a blessing to be honest with you,” said George Sadler, president of the vape and edible manufacturer Platinum Vape.
The marijuana businessman is talking about The Secure and Fair Enforcement or SAFE Banking Act of 2019. The legislation, in short, would allow banks to work with cannabis businesses without risk of violating federal law.
The bill just passed through the House of Representatives last week with a bipartisan vote. Supporters included all five representatives from San Diego and a majority of California’s Republican representatives, including Minority Leader Kevin McCarthy.
“I think everybody was surprised, absolutely surprised,” Sadler said of the news.
The challenge is even though some states have legalized marijuana, most banks are not able to do business with the cannabis industry because marijuana is still an illegal schedule one drug, according to the federal Drug Enforcement Agency.
The current law puts legal employers like Sadler in tough spots.
“We have over 80 employees. So without a bank account, we actually have to stuff envelopes with Cash for 80 something employees every week,” he explained.
But while the passage of the SAFE Banking Act in the House gives some hope, it’s unclear if it will pass the GOP-led Senate.
“It depends who you talk to. Some of us are more positive on that than others, some of us are a little more cynical than others,” explained Dallin Young, Political Director of the Association of Cannabis Professionals advocacy and lobbying group.
“I tend to be on the more cynical side of things,” he said.
But Young said the importance of the House passing it in the first place “cannot be overstated.”
At the state level, Senate Majority Leader Robert Hertzberg has been fighting for SB 51 for some time now, which would create a banking system specifically for the cannabis industry.
But that legislation—SB 51 has been shelved for this legislative session according to Katie Hanzlik, with State Sen. Hertzberg’s office.
Hanzlik says while the federal legislation would eliminate the need for SB 51, until that bill becomes the law of the land, proponents of the state legislation will continue.
As for the progress in Washington, D.C., Sadler says it’s “further than we’ve ever gone with banking, but we still got a ways to go.”
For now, the marijuana industry is left with high hopes for cashless cannabis.