Home Payment processors Pennsylvania cannabis industry lacks access to financial institutions – GantNews.com

Pennsylvania cannabis industry lacks access to financial institutions – GantNews.com

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By Anthony Hennen | The central square

(The Center Square) — Two bills in Pennsylvania’s legislative chambers could help the budding cannabis industry.

House Bill 2558 and Senate Bill 1167 would provide a safe haven for financial and insurance companies from regulatory or legal actions if they do business with cannabis companies. For patients, businesses, and the neighborhoods in which they operate, differences in state and federal treatment of marijuana have complicated the industry here.

On the one hand, the banking sector is not very involved.

“These businesses too, due to limited banking options and absolute domestic and international restrictions on using payment processors like Visa or Mastercard – they are going to be heavily reliant on cash,” said Scott Solomon, CEO of Operational Security Solutions. .

OSS provides security services for the cannabis industry around Philadelphia as well as in California.

Federal law still treats marijuana as a Schedule I substance, which means it has no approved medical use. Different states allow it for medical, recreational, or both, but the lack of federal approval keeps cannabis companies away from banking. The legal risks for financial institutions are too high.

Accompanying invoices could expand access to banking services.

Lack of financial services “is a risk to public safety as dispensaries are targets of robberies that put patients, employees and communities at risk,” Rep. Christopher Rabb, D-Philadelphia, wrote in a text. legislative. note. Legal risk also affects banks, real estate companies, security services, etc. “As the legal cannabis industry in the state grows, ancillary businesses will be critical to this emerging economy,” Rabb said.

Such legal protections and state-level banking access could benefit cannabis businesses as well as their neighbors. An unintended consequence of current law makes cannabis companies a target for criminals.

“If you’re a nefarious individual scanning a block, a cannabis business would probably be the most opportune for theft,” Solomon said. “You can get a product that you can easily convert, it’s basically anonymous, it’s very difficult to tie it to an individual – and money of course.”

Fixing what’s broken is the responsibility of financial institutions and individual businesses, Solomon said. Financial institutions working with cannabis “need to establish a very strong compliance program” and will need more staff and oversight to align with state and federal laws. Businesses need to be transparent with their banks, insurers and others to avoid breaches and stay compliant.

States like California and Colorado have served as models for medical and recreational cannabis programs in other states. As Pennsylvania debates legalizing recreational use, as The Center Square Previously reportedthe same legal and economic issues that affect the medical program will appear in any recreational program.

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