U.S. Banking Laws Need to Change for Pot Stocks to Flourish
Banking has long been a hotly contested issue in the U.S. cannabis industry. Because marijuana is federally illegal, leading pot stocks to watch and cannabis businesses do not have access to any financial services. This has made running any form of a marijuana-based business, quite difficult. Stories of employers having to pay their staff in cash are abound in the cannabis industry. And for this reason, banking needs to change very quickly. Marijuana stocks based out of Canada like Canopy Growth Corp. (NYSE:CGC) and Cronos Group Inc. (NASDAQ:CRON), are not hindered by a federal government that does not support them.
In Canada, cannabis is legal across the nation for recreational use. And although there have been many political battles in the U.S. to try and change this, none have panned out as of yet. The thing is, even in states where marijuana is only medicinally legal, they agree that cannabis is a needed product for the public. It appears as though it is simply a partisan issue that needs to be solved. But, with the livelihood of marijuana stock investors and small cannabis businesses on the line, something needs to change in order for these companies to succeed.
What’s Going on With The Cannabis Industry In The Federal Government?
As we’ve seen in the past six months, cannabis is the least of the government’s priorities. Of course, they have been working on attempting to curb the Covid pandemic from taking over. While this pandemic has been going on, we have seen some attempts to change cannabis law. And these changes could be a major update for marijuana stocks to take note of. In the past few weeks, we have watched as fights ensue over a Covid based legislative package.
Democrats have stated that they want to introduce the SAFE Banking Act into the legislation, to make the process swift. And, major U.S. marijuana stocks like Curaleaf Holdings Inc. (OTC:CURLF) and Green Thumb Industries Inc. (OTC:GTBIF), are waiting for things to change as well. The SAFE Banking Act states that its “purpose is to increase public safety by ensuring access to financial services to cannabis-related legitimate businesses and service providers and reducing the amount of cash at such businesses.” With this banking act, there’s no doubt that the cannabis industry and U.S. marijuana stocks would be changed positively, for good.
Why Banking is Such a Big Issue for Marijuana Stocks
Although banking is an issue amongst all cannabis businesses, marijuana stocks are hit hardest due to their size. These companies often are forced to utilize alternative fundraising methods such as convertible debt and more, due to having no access to institutional loans. In the meantime, money transport pot stocks like Brinks Co. (NYSE:BCO), have grown due to their necessity in the cannabis industry.
Not having access to banks means that cannabis companies are forced to conduct business solely in cash. This creates an incredibly dangerous position for small businesses and employees being paid in such a fashion. In addition, not having access to financial services has made the cannabis industry grow at a slower rate than it should have in the past few years. But, with change potentially on the horizon, the cannabis industry in the U.S. could see a brighter tomorrow.