Market Date: 8 July, 2020

Mitch McConnell matches with pot execs at California, pitched need for cannabis banking reform

Senate Majority Leader Mitch McConnell, a longtime opponent of reforming marijuana legislation, is spending more time than normal considering cannabis on a visit to California this week.

McConnell is currently attending at least 2 days’ worth of encounters by cannabis industry executives, small-business owners and urges from Southern California, so as to go over potential cannabis-related banking reform, among other subjects, according to individuals knowledgeable about the issue. McConnell’s schedule includes two cannabis-related lunches with executives and urges, among which will happen in Newport Beach, Calif., along with a tour of one cannabis-related business in the area.

It wasn’t immediately clear if McConnell’s California Wednesday and Thursday program indicates a change in his thinking concerning cannabis banking reform, the people said. McConnell’s Washington office didn’t respond to many requests for comment.

“I think this is absolutely positive that McConnell is meeting with stakeholders in the cannabis market,” PI Financial analyst Jason Zandberg advised MarketWatch on the phone. “The U.S. market needs the banking act to flourish, without it — there are legitimate companies that are following the rules that are facing major obstacles. Banking legislation would be a huge positive catalyst.”

The cannabis industry agents will try to convince McConnell that reform is essential because the present legal regime unfairly penalizes companies that comply with Federal laws, such as hemp farmers making the harvest for lawful CBD goods, according to a individual familiar with all the lobbying plan.

“We’re happy to see that Leader McConnell is coming to see how a regulated market is an improvement over prohibition,” National Cannabis Business Association executive director Aaron Smith advised MarketWatch within a meeting. “At this time the priority is banking, which impacts [McConnell’s] components in the hemp and CBD sector, in addition to legal cannabis companies here in California. That is our primary request — common-sense policies about banking and public security, and we are optimistic [McConnell] will observe the demand for this and move forward together with Chairman [Sen. Mike] Crapo.”

The senator’s trip to the Golden State comes weeks following the Democratic-controlled House of Representatives passed the Secure and Fair Enforcement (SAFE) Banking Act, a bill aimed at lending banks and credit unions extra clarity about servicing cannabis businesses which want to open accounts for things like paying bills. Because marijuana is prohibited in the Federal level, financial institutions may experience legal issues, and cannabis businesses — such as those who run cannabidiol, or CBD, companies — confront difficulties banking.

Substantial amounts of money sloshing across the cannabis sector makes pot businesses the goal of robberies and other crimes, lobbyists in favor of the SAFE Act have said.

Up till lately, McConnell seemed to be a significant roadblock to the Senate taking up the invoice, and has stated previously that marijuana is hemp “illicit cousin, which I choose not to embrace.” The hemp sector holds a substantial quantity of energy in Kentucky,” McConnell’s home nation, along with a new provision from the SAFE Act permits specific protections to farmers.

Crapo, a powerful Republican senator from Idaho, advised Politico in September he wished to maintain a Senate Banking Committee vote a cannabis banking invoice. Progressive groups like the American Civil Liberties Union, the Center for American Progress and many others have criticized leading House Democrats for moving ahead with a bill that does not address social-justice problems tied to years of cannabis prohibition.