Last month, Pennsylvania Governor Tom Wolf signed a bill into law which included “provisions to protect banks and insurers in the state that work with licensed medical marijuana businesses,” according to a report by Marijuana Moment.
Originally a standalone measure that passed in both the Pennsylvania Senate and House, it was later filed as an amendment to HB 311, and authorizes certain financial institutions to conduct savings promotion programs.
The amendment states that financial institutions with a license to do business in the Commonwealth “may provide financial services to or for the benefit of a legitimate cannabis-related business and the business associates” of the enterprise.
Currently, many financial institutions often see the cannabis industry as a high-risk market, which leads to a lack of financial services in the sector and has its own financial consequences.
Scott Solomon, the CEO of Operational Security Solutions (OSS), says the cannabis industry is “heavily cash-dependent” due to “limited banking options and absolute restrictions on the national and international level to use payment processors like Visa or Mastercard.” OSS provides security services for the cannabis-related businesses around Philadelphia.
Rep. Christopher Rabb (D-Philadelphia) wrote in a legislative memo that the lack of financial services “is a public safety risk as dispensaries are targets for robberies that put patients, employees, and communities at risk.”
Solomon adds that out of all potential targets, “a cannabis business would arguably be the most opportune for theft” in the eyes of a burglar. “You can get product that you can easily convert, it’s essentially anonymous, it’s very hard to tie it back to an individual – and cash of course,” Solomon says. The new provisions seek to alleviate the pressure off of these businesses.
The legislation also says that state government agencies cannot “prohibit, penalize or otherwise discourage a financial institution or insurer from providing financial or insurance services to a legitimate cannabis-related business” or its workers. The measure does, of course, have its limits. It does not, for instance, protect financial institutions or insurers from federal intervention, and the bill specifies that the law will not require banks or insurers to provide services to medical marijuana businesses.
Among the many Pennsylvania legislators who voted on HB 311, longtime advocates for the legalization of cannabis Ryan Bizzarro (D-District 3), Robert Matzie (D-District 16), and Mike Carroll (D-District 118) all voted in favor of the measure.
Democrats Bizzarro and Matzie are on the ballot for the upcoming November 8th general election, and Mike Carroll’s term ends on November 30th, 2022. Democrat James Haddock is on the ballot for Carroll’s district, House District 118.
Rep. Bizzarro has long been an advocate for cannabis legalization. As the chairman of the House Democratic Policy Committee, he recently hosted the Pennsylvania Hemp Production Policy Hearing with fellow Rep. Danilo Burgos. In regards to decriminalization, Bizzarro said, “Eventually, it is going to be the law of the land. It’s just a matter of when.” When Erie City Council deliberated on reducing the penalty for possession in 2017, Rep. Bizzarro had this to say: “It’s a step in the right direction. It certainly saves us money. Saves taxpayers money. But it’s also a step in the right direction for bringing Pennsylvania up to the 21st century and how we’re handling these more petty drug offenses.”
Rep. Matzie is also a staunch supporter of cannabis legalization. When the House passed legislation in 2016 to legalize medical cannabis in Pennsylvania, the congressman representing Beaver/Allegheny said, “Once this bill becomes law, patients in Pennsylvania who suffer from debilitating diseases will be able to legally acquire, with their doctor’s consent, the medicine they need… Not only can it provide relief, it can at times offer hope to patients who would otherwise have none.”
Reps. Bizzarro, Matzie, and Carroll also voted in favor of a 2021 measure to amend cannabis laws to make it easier to remove yeast and mold contaminants.
In a 2015-2016 survey by Marijuana Policy Project tracking the positions of Pennsylvania legislators, Reps. Bizzarro, Matzie, and Carroll scored some of the highest percentages of special interest approval at 95 percent.
The upcoming general election will be a referendum on the Republicans currently in office, and could give voters the opportunity to vote for Democrats with strong stances on cannabis legalization.
Paul Takac (D), for instance, is running against Justin Behrens in District 82, replacing incumbent Republican Johnathan Hershey. At a Q&A with Penn State students in April, Takac said, “I think it’s far past time that we legalize recreational marijuana,” citing new revenue sources, medicinal use, and decriminalization as a pathway to restorative justice and reasons for legalization. “There are a lot of people who have convictions for nonviolent drug offenses that I think we could revisit,” he said. “It only makes sense, and it’s worked in other places — I think it can be regulated.”
When the US House passed the SAFE Banking Act in early February 2022, Rep. Ed Perlmutter (D) noted the need for reforms, advocating for the struggling cannabis industry. In a statement, Perlmutter said, “Cannabis-related businesses — big and small — and their employees are in desperate need of access to the banking system and access to capital in order to operate in an efficient, safe manner and compete in the growing global cannabis marketplace.”
HB 311 and other legislation, such as House Bill 2558 and Senate Bill 1167, seek to aid the industry on a statewide level and provide a foothold for budding entrepreneurs and protections for the services that finance and insure them.