Paypal tackles banking reform for cannabis businesses

A new proposal to allow U.S. banks to touch money from the legal cannabis trade has just received some high-profile support.

PayPal Inc. thus began supporting the adoption of the law SAFE Banking Act, which would, among other things, allow US banking institutions to participate in the cannabis industry.

The bill is making slow progress so far but, as PayPal's new decision shows, is also attracting interest from key players in the financial sector.

PayPal currently has a «No Weed» policy, even for by-products such as vaporizers and bongs. To our knowledge, several Swiss and French merchants linked to the cannabis industry have had their PayPal accounts closed as a result of this policy.

Paypal's support was announced on the Congressman's website Ed Perlmutter, the man behind the SAFE Banking Act.

«PayPal's foray into the SAFE Banking Act is a sign that major financial services companies are eager to start doing business with the cannabis industry, and are willing to fund us to get the legislation passed by Congress,» its website reads.

The SAFE Banking Act was designed to tackle the banking problems of the cannabis industry. Banking companies refer to the federal government and refuse to work with cannabis companies for fear of being prosecuted for laundering drug money.

In 2014, the U.S. Treasury issued guidelines for banks regarding cannabis, but without explicit legal reforms, banks and other financial institutions chose not to accept weed money, even in States where cannabis is legal.

Nevertheless, last week Bank of America began covering the stock market transactions of the four largest cannabis companies.

The SAFE Banking Act is championed by a bipartisan group of 22 Senators and supported in Parliament by 162 co-sponsors. A Finance Committee approved the text in March, and it now heads to Parliament, where it should also be passed. Then it's on to the Senate, where things are likely to get even tougher.