Cato Daily Podcast
Two Problems That Vanish with the End of Cannabis Prohibition
Jul 18, 2024
Paul Best, an expert in cannabis policy, discusses the banking challenges faced by marijuana businesses due to federal prohibition. Ending prohibition could ease banking issues and enable more research on cannabis.
09:54
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Quick takeaways
- Cannabis businesses face banking challenges due to federal prohibition, leading to cash-only operations and security risks.
- Federal prohibition inhibits cannabis research, hindering exploration of therapeutic benefits and necessitating broader scientific investigations.
Deep dives
Challenges of Banking Services for Cannabis Retailers
Cannabis businesses face obstacles in accessing standard banking services due to federal cannabis prohibition laws that deter banks from engaging with them. As a result, many legal cannabis retailers are compelled to operate on a cash-only basis, leading to security risks, increased operational costs, and vulnerabilities to criminal activities such as robberies. FinCEN's stringent regulations further hinder financial institutions from providing comprehensive services, contributing to the banking challenges impacting the industry.
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