In late 2018, Crown Heights resident Ginette Aarons started an online marketplace, selling a line of homemade, topical CBD salves to relieve joint pain for conditions such as sciatica and arthritis. The salves were effective and a hit, and through purely word-of-mouth promotions, her home business took off! But by early 2019, her online business came to a halt when PayPal suspended her account for selling a cannabis-related product, which is still illegal in some states.
Well, Aarons may get an olive branch for her online business if New York Attorney General Letitia James gets her way:
On Monday, James and a bipartisan coalition of 21 other attorneys general put forth legislation (H.R. 2093; S. 1028), the "Strengthening the Tenth Amendment Through Entrusting States (STATES) Act" that would allow legal cannabis-related businesses to access the banking system.
The legal cannabis industry in 33 states and several U.S. territories employs hundreds of thousands of Americans nationwide and is expected to generate revenue between $50 billion and $80 billion over the next 10 years.
However, current federal banking laws, which reflect the federal status of marijuana as an illegal drug, force legitimate cannabis companies nationwide to operate mainly in cash. The STATES Act would bring billions of dollars of existing cash transactions into the regulated banking sector, subject them to oversight, and reduce the risk of both violent and white-collar crime affecting the growing marijuana industry.
So eager to benefit from that potential market, online seed banks from all over the world are competing to get verified and make their way to the U.S. As a result, they are not only gradually contributing to the U.S cannabis industry but also receiving mass profits.
"As the marketplace for legal cannabis-related business evolves, federal regulations governing the banking system must keep pace," said James. "It's not only commonsense to fold a growing multi-billion-dollar industry under the regulated banking sector, but it's also a matter of public safety. With such widespread, bipartisan support, there is no reason this bill shouldn't pass without delay."
The STATES Act has widespread, bipartisan support with 60 cosponsors in the U.S. House and 10 cosponsors in the U.S. Senate.