A cadre of New York and New Jersey cannabis businesses last week sent a letter to U.S. Senate Majority Leader Chuck Schumer (D-NY) urging him to bring the SAFE Banking Act up for a vote and include “potential restorative justice provisions” in the bill.
The letter, which includes 50 businesses as signatories, applauds Schumer’s leadership, along with Sens. Corey Booker (D-NJ) and Ron Wyden (D-OR), in introducing the Cannabis Administration and Opportunity Act (CAOA) but rightly warns that “the current political environment in Congress will preclude the CAOA from becoming law before the end of the year.”
“Therefore, we ask that you champion proposals that can get the necessary bipartisan support to become law and provide small operators and aspiring entrepreneurs the relief and opportunities they need to support or launch a new cannabis business,” the businesses request in the October 28 letter.
The signatories note that cannabis business startup costs can range from $150,000 to $2 million due to fees, real estate prices, insurance, security, and regulatory costs. Additionally, the authors state, many social equity operators are charged “exorbitant rates” from 20-40% by private investors “if they are even able to raise funds in the first place.”
The letter contends that the lack of access to basic and essential banking services is “blunting the impact” of social equity programs instituted by some states and exposes them to security risks.
The groups also argue that some states’ social equity programs have preconditions that are “far too restrictive” as some programs require applicants to prove they have had, or currently have, a profitable business, years of financial statements, and “other preconditions that are difficult for those with an old criminal record to obtain.”
“While the SAFE Banking Act is not the solution to all of these issues,” the letter states, “we firmly believe that if paired with restorative justice measures that remove past convictions as a barrier, thousands of people trying to enter or survive in this industry would have a fighting chance to be successful.”
Since Democrats took control of both the House and Senate and White House in 2020, they have been so far unable to pass any meaningful cannabis-related legislation through both chambers. Earlier this month, President Joe Biden (D) issued a pardon for federal cannabis possession cases, while urging state governors to issue their own pardons.
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