There’s probably been a moment in your life when you have felt like the character Kate Dibiasky or Dr. Randall Mindy from the Netflix film, Don’t Look Up. You know the moment, the one where you are screaming “Something is wrong here, we need to do something about it before something bad happens!”- only to get a passive and frustrating response like “Okay, at this very moment, I say we sit tight and assess.” The feeling of that moment can be summed up in one word - defeat - and those of us who have been involved in banking and the cannabis industry know that feeling all too well. Allow me to explain.
The premise of the film is simple: There’s an earth destroying comet with a trajectory to hit Earth in six months that is identified by scientists, Diabasky and Mindy. After alerting government authorities, Diabasky and Mindy are sent to Washington to meet with the President to discuss their findings. The meeting is continuously delayed and ultimately rescheduled; finally their results are announced and supporting evidence is presented, yet they are laughed out of the room and told they need to “sit tight” while the government “assesses the situation”. In an effort to avoid spoilers, we’ll simply say that the government assessed the situation and efforts were made to “deal” with the comet (you’ll have to watch to find out the outcome).
So how does any of this compare to the world of cannabis banking? Let’s go ahead and start with the elephant in the room. Those of us who have ever been in the world of banking at any point know that nothing in banking is fast (except money movement) and when you attempt to get the government involved, things tend to move at a snail's pace, if at all. In the case of cannabis banking, industry advocates have been metaphorically screaming about an earth destroying comet since at least 2017 when the first version of a Safe Banking Act was introduced.
What exactly is the earth-destroying comet in this scenario? It’s the cannabis industry’s inability to find easily accessible and cost-effective financial services, forcing the industry to become cash intensive and ultimately underground. Why does this matter? It matters because the cannabis industry experienced just shy of $15 billion dollars in sales in 2021 alone and you know where most of that money went - NOT in a financial institution. That is billions of dollars in cash floating around the streets, hidden in storage units, under mattresses, buried outside, kept in safes, etc. Simply put - it’s a major public safety concern.
Every day that we “sit tight and assess” is another day where billions of legally derived cannabis dollars remain outside the traditional financial system. If the government would heed the warnings of industry experts, that a confusing dichotomy between state and federal law leaves many industry participants underserved and vulnerable to financial crime, then maybe there would be action to enable financial institutions to more confidently bank the cannabis industry through a bill such as the Safe Banking Act.
So what’s it going to take to get cannabis banking reform passed? We wish we had the answer. Every time a version of the Safe Banking Act looks like it might actually pass, it somehow gets derailed. A myriad of opposing stances have been stated anywhere from addressing legacy cash, racial equality concerns, de-scheduling concerns, etc. Some opposition to cannabis reform has also been voiced by lobbyists representing the pharmaceutical industry - eerily similar to a large corporate campaign donor influence in Don’t Look Up.
While there are many comparisons that can be drawn between Don’t Look Up events and the never-ending saga of cannabis’s place in the business sector, in real-life there is an unsung hero that can swoop in to help save us from the worsening public safety issue caused by the lack of cannabis banking reform. Who might that be? You, actually. How so? Despite the fact we have seen no cannabis banking reform, many financial institutions successfully bank the cannabis industry today. Instead of “sitting tight and assessing” they opted to “assess and take action” and seized the opportunity to strengthen their community’s public safety by serving cannabis businesses in their communities, and in turn, grow a profitable line of business that provided opportunities for deposit growth, fee income and new loan opportunities. If the scientists in the movie could get the attention on the impending comet, so can you also pivot on your course of direction with profitable, emerging markets.