On February 13, 2019, the House Financial Services Committee will hear the Cannabis Banking Bill. Nothing will happen, just noise to determine if any traction can be achieved from a more receptive Congress. With a new Democratic majority in the U.S. House, the movement of cannabis bills in committee is expected to be smoother. The bill, sponsored by Reps. Ed Perlmutter (D-CO) and Denny Heck (D-WA), would allow banks and credit unions to work freely with state-legal cannabis businesses (even as the plant remains illegal on the federal level). On the surface, the goal is twofold: Facilitate business development in the industry and allow regulators to clear a significant hurdle en route to broader cannabis reform legislation.
For years, U.S Rep. Pete Sessions presided as chairman of the House Rules Committee and routinely blocked hearings on cannabis legislation. Things are different this year. The byproducts of legitimate banking options in the cannabis sector include far-reaching benefits for other areas of the U.S. economy that have been eyeing the early growth of cannabis businesses. A fully banked marketplace would allow regulators to determine the actual size of the market. Now, organizations across the cannabis space have gathered their best estimates, based on prior and projected sales, of what sort of market growth is to be expected from this new industry. Legislation like the SAFE Banking Act would also provide a palette to financial regulators, upon which further oversight may be levied. That process may be the first beneficiary of a new power structure in the U.S. House. The industry will be watching the House Financial Services Committee hearing closely.
In this instance, noise is good.