Mitch McConnell Opposes Protection For Banks That Deal In Cannabis
Amid all the political shouting over the COVID-19 relief bill in Congress, one small fact went unnoticed by many people. Sen. Mitch McConnell of Kentucky, the majority leader in the Senate, seemed extremely pleased about not including protection of banks that work with the cannabis industry in the relief bill.
McConnell released a press release that called the protection part of a “multi-trillion-dollar left-wing wish list.”
It’s a strange position for the usual pro-business Republican party. And McConnell became a key figure in getting hemp made legal nationwide, paving the way for CBD products on store shelves. But in the recent press release, he listed elimination of protection for banks as a “win,” along with eliminating other items such as bailouts to local and state governments and studies into the inclusion of minority businesses into the cannabis industry.
Here’s Why This Is Important
Chances are the dispensary you deal with every day might have to make most transactions in cash. While there are innovative ways that have emerged to safeguard transactions, dispensaries understandably want the same access to financial services that other businesses enjoy.
However, federally insured banks won’t extend financial services to cannabis businesses out of fear they will run afoul of federal law. While legal for recreational use in 16 states and for medical use in 37 states, cannabis remains a Schedule I illegal drug at the federal level. Working with a business that deals in cannabis could open banks to potential punitive action by federal regulators.
Democrats in Congress have worked hard to make a change, but nothing has made it through the GOP-controlled Senate. In the meantime, the number of banks willing to work with the cannabis industry continues to drop, according to federal data.
Georgia Is On Everyone’s Mind
McConnell’s position on the banking issue makes the upcoming Georgia Senate races even more important. Two Democrats are seeking to win seats in the U.S. Senate against two Republicans. The GOP candidates are Kelly Loeffler and David Perdue, while their Democratic opponents are Raphael Warnock and Jon Ossoff.
If the Democrats win, control of the Senate would flip to the Democrats, making protection of banks – or even legalization of marijuana at the national level – much more likely. Both Democrats lead in the most recent voter polls.
It’s also important because, up to the press release from McConnell, people in the cannabis industry felt that protection of banks would likely pass no matter which party was in power. However, with McConnell now lumping the measure in with other ideas he does not like, it seems wins in the Georgia races are needed to get even that measure passed.
Clearly, what happens in Georgia will have a big impact on your local dispensary, no matter where you live in the United States.