There’s no sugarcoating it: Marijuana equities are in a slump. But as someone who closely follows the industry, I contend that marijuana legalization is inevitable on the federal level. And when that happens, cannabis investments will hit the stratosphere.

I also believe that efforts to clarify and harmonize federal banking laws and regulations as they pertain to the state-legal cannabis industry will ultimately prevail. But reform movements of any type rarely move in an expedited, linear fashion.

Pro-marijuana politicians in Congress haven’t given up. Case in point: Senate Majority Leader Chuck Schumer (D-NY) recently renewed his efforts to get the Secure and Fair Enforcement Regulation (SAFER) Banking Act through the Senate.

In an interview with Yahoo News that was published on November 18, Schumer said marijuana legal normalization is an issue whose “time has come.”

Schumer asserted that pushing a bill on marijuana banking to the forefront hinges on rallying additional GOP support. Schumer contends that this endeavor is challenging, primarily because certain legislators fear that their voters, especially the older demographic, are opposed to embracing reform, despite the majority of voters nationwide supporting it.

A surge in robberies at licensed cannabis shops nationwide is helping drive the push for federal banking reforms related to weed.

Schumer insisted that “the people are on our side,” as evidenced by the November 7 referendum vote in Ohio whereby an overwhelming majority voted to legalize recreational marijuana.

Read This Story: Buckeye Blowout: Ohio Overwhelmingly Approves Legalization of Adult-Use Pot

Schumer on September 20 filed the Secure and Fair Enforcement Regulation (SAFER) Banking Act, an expanded version of the SAFE Act that has been languishing in Congress.

SAFER cleared the Senate Banking Committee in September but it’s still being held from the floor as senators work to assemble a stronger bipartisan coalition behind the bill.

The SAFER Banking Act would prevent federal banking regulators from prohibiting, penalizing or discouraging a bank from providing financial services to a legitimate state-sanctioned and regulated cannabis business, or an associated business, such as a lawyer or landlord providing services to a legal cannabis business.

This legislation also would create a safe harbor from criminal prosecution and liability and asset forfeiture for banks and their officers and employees who provide financial services to legitimate, state-sanctioned cannabis businesses, while maintaining banks’ right to choose not to offer those services.

SAFER would undercut the growing black market in marijuana sales and improve the industry’s financial transparency in legal cannabis states. SAFE and SAFER are closely aligned. SAFE has passed the House several times but has remained bottled up in the Senate.

Schumer said in the interview that he’s trying to secure more Republican votes for SAFER. He would need to get about 10 GOP members to join all Democrats to reach the 60-vote threshold for passage.

The imperative for banking reform…

Despite the rapid pace of state-level legalization, cannabis remains illegal at the federal level in the United States. This dissonance between state and federal regulations creates a complex legal landscape that directly impedes the marijuana industry. One of the most glaring consequences of this misalignment is the reluctance of traditional banks to provide financial services to cannabis-related businesses.

However, as the following chart shows, the financial stakes are enormous:

Due to the federal ban, financial institutions fear potential legal repercussions, leading them to steer clear of any involvement with marijuana-related enterprises. As a result, cannabis companies find themselves excluded from routine banking services that are crucial for any legitimate business to thrive. The lack of access to traditional banking options forces many cannabis businesses to operate primarily in cash, exposing them to heightened security risks and making financial transactions more susceptible to fraud.

Operating as predominantly cash-based entities not only puts cannabis businesses at risk but also raises concerns about transparency and accountability. Without the oversight provided by traditional banking, it becomes challenging for regulatory bodies to monitor financial activities within the marijuana industry effectively. This lack of transparency not only jeopardizes the safety of cannabis businesses but also impedes the government’s ability to enforce regulations and collect taxes.

Banking reform would provide cannabis businesses with a secure and regulated environment for financial transactions. This would significantly reduce the risks associated with operating in cash, such as theft and fraud, creating a safer business environment for both entrepreneurs and consumers. Investors, too, would stand to gain from banking reform because it would foster a more responsible and transparent industry.

Editor’s Note: The movement to legalize marijuana is getting broader with each passing day, in turn opening new investment opportunities.

To learn more about these trends, I suggest you read my book: The Wide World of Weed and Psychedelics.

This concise, clear, easy-to-read book reveals everything you need to know about the wide world of legal weed and psychedelics.

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John Persinos is the editorial director of Investing Daily.

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