United States: Congress makes progress on cannabis decriminalization

Yesterday, a bill for the federal decriminalization of cannabis was introduced in Congress. At the same time, the Senate Committee on Banking, Housing and Urban Affairs convened for a hearing called «Challenges for Cannabis and Banking: Outside Perspectives», which aims to examine federal legislation to give the nascent cannabis industry access to traditional financial services.

Legislative proposals

Congress was already considering the decriminalization of cannabis in early July, and legislative proposals are beginning to be submitted. The law Marijuana Opportunity Reinvestment and Expungement (MORE) was proposed by Jerrold Nadler, a Democrat from New York, and Kamala Harris, a Democrat from California, and its goal is to remove this plant from the Controlled Substance Act. Marijuana is currently classified in Schedule 1, considered the most dangerous, along with other drugs such as heroin, ecstasy and LSD.

«Times have changed - marijuana shouldn't be a crime,» said Harris, a presidential candidate. «We need to start regulating marijuana and erase the convictions against millions of Americans so they can get on with their lives.» Nadler says cannabis laws are «racially motivated» and have «disproportionately affected communities of color.».

The proposed legislation would also prevent federal agencies from deporting immigrants for cannabis-related convictions, and would impose a 5% tax on cannabis products to create grants for minorities and low-income communities. The bill would create three War on Drugs reparations funds that would provide job training, legal aid and community reinvestment grants.

Harris and Nadler aren't the first to take a stand on cannabis decriminalization, which is also a campaign issue for Elizabeth Warren, Democratic Senator from Massachusetts and also a presidential candidate. Her STATES Act, would strengthen the Tenth Amendment to ensure that federal authorities cannot interfere with state-approved cannabis programs. New Jersey Senator Corey Booker has also proposed the Marijuana Justice Act, which would remove cannabis from the Controlled Substances Act. 

The decriminalization of cannabis at the federal level was also a Barack Obama project, as he revealed after his term of office.

Banks ready to seize this market

U.S. banks say they are ready for this new market, which promises great opportunities. The Senate Committee on Banking, Housing and Urban Affairs met to discuss the economic benefits of decriminalization. A bill in Congress dubbed the SAFE Act would allow financial institutions to work with cannabis-related businesses without threat of federal sanction.

Last year, legal cannabis sales in the U.S. soared by US$10 billion in the states where it is legal. The state of California alone generated more revenue than Canada.

«It's overwhelming: we're bursting at the seams with partnership proposals,» says Scott Greiper, president and founder of Viridian, America's first licensed cannabis investment bank. Greiper says he has to decline 95% of the offers received, which come mainly from individuals, hedge funds as well as high-net-worth investors looking to invest in the U.S. cannabis industry.

Other banks are also looking to enter the industry. Some of them are now offering shares in Canadian companies. Goldman Sachs and Bank of America were also involved when Canadian company Constellation Brands invested $4 billion in Canopy Growth.