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The Problem with the Cannabis Reform Bill

Shooting for the moon with full legalization could derail more meaningful progress at the federal level, such as the SAFE Banking Act.

Opinions expressed by Entrepreneur contributors are their own.

Talk about fireworks. Three states celebrated freedom over this year's Fourth of July holiday weekend by enacting new laws impacting the legal use of cannabis. In both Virginia and Connecticut, lawmakers passed legislation earlier this year allowing recreational marijuana use, and voters in South Dakota approved medical marijuana use in last year's election. The new laws in all three states took effect July 1.

There was also some encouraging news from the Capitol last week, when Sen. Chuck Schumer (D-New York)—along with his colleagues Sens. Cory Booker (D-New Jersey) and Ron Wyden (D-Oregon)—introduced the Cannabis Administration and Opportunity Act. The move fulfills a promise Schumer made during an April 20 press conference to introduce a bill "in the near future," and it is a dream come true for the cannabis industry and its proponents.

Related: The President Maintains His Stance On Broader Cannabis Reform

This comprehensive approach addresses the robust reforms needed for cannabis banking and tax policy and the need for increased access to cannabis medicine for patients and consumers. Perhaps even more important, the bill attempts to right the wrongs created by the war on drugs, specifically the injustices created by the disproportionate enforcement against minorities.

But while this bill is a big step in the right direction, there are legitimate concerns over its viability of becoming law given the obstacles it faces in Congress and President Biden.

A more realistic path forward

While we are hopeful and enthusiastic about this bill and grateful for the attention Senate leaders are giving the issue, we still believe that pursuing the incremental change of the Secure and Fair Engagement (SAFE) Banking Act would be a more pragmatic and realistic way to propel the growing cannabis industry forward. The SAFE Act would ease banking restrictions against cannabis companies operating in legal states. Passed with bipartisan support in the House and possessing the help of the American Banking Association, the SAFE Act provides the best opportunity to ease the financial challenges of the U.S. cannabis industry, and it has a far more realistic chance of ever reaching Biden's desk. While the SAFE provisions are included in Schumer's comprehensive bill, cannabis supporters can only hope that this shoot-for-the-moon approach will succeed or at least provide the negotiating room for the eventual passage of the SAFE Banking Act provisions. At worst, the push for the comprehensive bill could doom any success of meaningful legislation this session.

Cannabis leaders agree that full federal legalization is a worthy and ultimate goal of cannabis reform. But the longer it takes to enact fair cannabis financial reform, the longer the industry must wait to engage the full financial resources that every other legal industry is free to enjoy. It will force more businesses to close doors due to an inability to access business loans others take for granted. It means fewer and fewer cannabis companies will be able to pursue growth opportunities. It means more businesses will face stressors when financial challenges occur--stressors other companies find relief from through the banking industry.

State policymakers and business leaders have done the heavy lifting determining how the cannabis industry can survive and thrive. Congress should support this work by enabling an environment for further growth and stability. Schumer and Company may be hamstringing the best opportunity in years to enact meaningful legislation for the industry by pursuing this go-for-broke approach. Business leaders are accustomed to taking baby steps to accomplish what they need.

Keep your eye on the prize

Of course, we support full federal legalization, but we also need to move the industry forward. So our hope for this latest bill is tempered by skepticism. Approximately 60 percent of the U.S. population can now legally access cannabis for either medical and/or recreational use. The provisions in the SAFE Banking Act would put the cannabis industry in these 34 states on a more stable footing while encouraging investment and helping to destigmatize these businesses further. Cannabis patients, consumers, and the businesses they depend upon deserve for the industry to be normalized. If we abandon a chance at real change by pursuing an unrealistic accomplishment, everyone loses.

We appreciate that Sens. Schumer, Booker, Wyden, and others and many leaders in the House are demonstrating leadership on this issue. However, we believe we should not substitute idealism for real progress. We hope that the Cannabis Administration and Opportunity Act will receive the full and robust consideration it deserves and that its success will demonstrate how Washington can conquer challenging issues. But should the effort fall flat, we urge Senate leaders to aggressively push for the immediate passage of the SAFE Banking Act and work to get it signed by the President.