THE KVK PERSPECTIVE
Due to federal prohibition, some of the biggest issues that commercial cannabis businesses face are the lack of access to reliable banking, commercial lending, and capital markets. Now, amid the current pandemic, commercial cannabis businesses are further burdened by the lack of access to federal economic relief in the form of loans or stimulus packages, despite being deemed an essential business in most states that have issued shelter-in-place orders. The lack of access to banking is further exposing the consumers, patients and employees of cannabis businesses to additional and unnecessary contact with individuals and surfaces for cash handling purposes at a time, where any contact must be limited due to the novel coronavirus potentially being able to be transmitted by contact with infected surfaces and through individuals.
On Friday, May 15, 2020, The U.S. House of Representatives passed another coronavirus stimulus bill, called The Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, that includes a provision that would allow banks to serve state-licensed cannabis businesses.
The HEREOES Act further indicates the House’s support for licensed cannabis businesses and could be a step towards legitimized banking for cannabis businesses. However, cannabis businesses should not keep their hopes up because the Senate has never passed cannabis banking legislation and the President and Senate Republicans have clearly voiced their opposition to the cannabis business protections in the HEROES Act.
By Nellie Niakossary and Tatyana Brenner, May 21, 2020
Let the experienced and dedicated legal team at Katchko, Vitiello & Karikomi, P.C. help you navigate the complex, constantly changing and often confusing legal and regulatory landscape facing your cannabis business, give us a call today.