A new study finds that states legalizing cannabis increases banking activity. There has been concern that cannabis businesses haven’t been able to access banking like most businesses do. Researchers looked at bank regulatory filings between 2011 to 2016 to do their study.

“Using difference-indifference estimates, we find evidence of significant increases in deposits and lending after recreational cannabis legalization,” the study claims. “We attribute this finding to either limited concern about the perceived riskiness of deposits surrounding cannabis legalization, or optimism that policies would be adapted to limit banks’ risks from regulatory uncertainty.”

Michael Correia, director of government relations at the National Cannabis Industry Association, told Cannabis News Box that these findings don’t surprise him.

“Banks are risk averse, and as more states legalize, it gives just a little more certainty for a bank,” Correia said. “And gives them more confidence, operating in a state where the law (and state officials) supports it.”

Correia said he still hears about banking concerns a lot when he talks to cannabis business owners. He said it’s not just a problem of being able to
get a bank account but also being able to get access to capital at reasonable rates. Congress passing the SAFE Banking Act would help these businesses.

“I think the report confirms what we already know, legalizing, taxing, regulating cannabis lowers the risks for everyone associated with the cannabis industry. Which gives more certainty, lowers costs, allows for the illicit market to decrease,” Correia said. “SAFE is important, because it
allows for competition in banking services, lowering costs to capital for small businesses and allowing for them to scale up, grow, and be competitive with MSOs.”

Senate Majority Leader Chuck Schumer has not yet brought the SAFE Banking Act up for a vote. Correia said he is quite confident that if the SAFE Banking Act is put up for a vote, it will pass.

“It has 39 co-sponsors (including 9 Republicans) and would easily get over 60 Senators. But he hasn’t brought it up, because he, Senator Booker, and Senator Brown think it doesn’t go far enough to address civil justice issues around equality, incarceration, and expungement,” Correia said.

Legalizing cannabis entirely would obviously also solve this problem cannabis businesses have been facing. Getting that done has also been a challenge for this Congress, but Schumer has said he is committed to getting it done.