The HEROES Act ensures banking services and pandemic-safety practices for the industry. But it may not pass the Senate.

Practically overnight, the COVID-19 pandemic achieved for cannabis what decades of lobbying and lawmaking have not: legitimacy as an essential business sector. 

Many in the industry were hopeful they also could attain something else sought for decades—access to banking services. But now that Senate Republicans and the President have publicly opposed the U.S. House’s HEROES Act, there’s little chance stakeholders will see these benefits soon.

And that means the cannabis industry–an essential business sector and an important part of the nation’s economic recovery–will continue to face an uneven playing field that will keep it from its full potential. Perhaps more troubling, though, is that the industry will have to continue to rely on cash transactions even though those exchanges can involve COVID-19 contamination.

Related: People Are Spending Their Stimulus Checks On Cannabis

What you need to know about the HEROES Act 

On May 12, the U.S. House of Representatives introduced the fifth stimulus proposal in response to the ongoing crisis, producing an expansive $3 trillion plan that is the largest stimulus bill in U.S. history. 

The Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act is more than 1,800 pages of proposals on topics including expanded stimulus checks and unemployment assistance, hazard pay for essential workers, college-debt aid, more small-business funding and financial help for state governments, money for SNAP meals, and even emergency relief for the embattled U.S. Postal Service.

Although cannabis companies affected by the COVID-19 pandemic still aren’t eligible for federal assistance under the HEROES Act, it would give cannabis operators something vitally important because included in it is a reprisal of the industry-lauded Secure and Fair Enforcement (SAFE) Banking Act. 

This bipartisan plan was approved by the House last year and would give cannabis businesses and their ancillary business partners access to the banking services most companies take for granted, such as loans, credit lines and accounts. Right now, because of the Schedule I status of cannabis under the Controlled Substances Act, financial institutions can face expensive and prohibitive penalties for doing any kind of business with cannabis companies; the SAFE Banking Act would remove those penalties.

Though the measure previously was approved by the House 321-103 in September 2019, it never had the support of Senate Majority Leader Mitch McConnell and other key Republican senators, and it died in the Senate Banking Committee. 

Recently, though, Democratic lawmakers saw the HEROES Act as a perfect opportunity to revisit the banking legislation. After all, this latest pandemic relief bill is so named because of its overarching goal of giving relief to the array of heroic frontline workers who have kept going during the pandemic. Essential cannabis companies and their employees are certainly part of this collection of workers that lawmakers were trying to help.

Additionally, though, another concern became a driving force for the act’s reintroduction: the novel coronavirus contamination of cash. These kinds of contamination risks affect cannabis workers in dispensaries the hardest, perhaps, but they also pose a danger to customers, industry regulators and supply-chain partners.

Related: Everyone but Republicans Favors Legalizing Marijuana Nationally

What the opposition says

Regardless of the public-safety aspects of including the SAFE Banking Act with the HEROES Act, the omnibus relief plan started attracting GOP Senate opposition while it still was being debated in the House. Critics were concerned over its price tag and that of previously approved relief plans, such as the $1.8 trillion CARES Act. Another criticism of the HEROES Act was that it was a “message bill” produced by Democrats without any input from across the aisle. 

For whatever reasons lawmakers and the president are opposing the relief bill, it’s regrettable that the provisions of the SAFE Banking Act continue to be denied to cannabis companies during these challenging days. Here are some of the main ways in which the SAFE Banking Act’s provisions would help the industry, aid national economic recovery efforts and help stop the spread of COVID-19.

1. It normalizes banking for the industry

Today, cannabis companies don’t always have access to essential banking services because of the Schedule 1 status of cannabis. And they face a lot of other banking challenges not seen in other industries, too. 

For example, the typical MSO often has to maintain a multitude of bank accounts, such as one for every state in which it operates. Anyone with just a single bank account can appreciate the logistical nightmare it can be for today’s cannabis operators who have to manage 10 or more, yet that’s the reality in this industry. 

By codifying legal protections for banking institutions, though, the SAFE Banking Act levels the playing field by giving banks and financial institutions the ability to interact with cannabis companies in the same way that they would with any other kind of legal business entity. That means offering services and capital investments, as well as streamlining services to avoid the requirements for multiple accounts.

Even with this provision, don’t expect Chase, Goldman Sachs and other large financial institutions to jump into the cannabis sector wholeheartedly if banking regulations change. But many smaller banking groups will jump in to expand their customer bases. And that’s something badly needed today for an industry deemed essential even in an economy in which capital is scarce.

Of course, cannabis companies will be better positioned to help economic recovery efforts if they have access to more capital investment from banks, too, which this act allows.

2. It allows consumers to use credit and debit cards 

On the retail front, the SAFE Banking Act would allow cannabis companies to utilize credit-card processing services. With increased competition, debit card fees incurred by customers would be expected to decrease.  

This is a convenience issue for consumers, but it’s also one tied to profit-making for companies that use card transactions. For example, one case study showed that when McDonald’s customers use cash sales average $4.50, but when they use credit cards average ticket sales increase to $7. 

3. It causes consumer savings

For consumers who have to make ATM transactions part of their cannabis purchases, the fees can add up quickly. By comparison, though, the use of credit or debit cards can prove to be the most economical for consumers over time. 

As cannabis companies move toward fewer cash transactions, those savings also can be passed down to consumers, too. Right now, it can be expensive for cannabis companies to work in such cash-heavy retail environments, ones that require multiple levels of accountancy and armed security staff for protection.

4. It prevents the spread of COVID-19

Even though banking access would bring a huge financial benefit for today’s cannabis industry, the inclusion of the SAFE Banking Act in this latest COVID-19 relief proposal was set in motion by another major concern that is gaining attention today: the public-health issue of handling cash during the pandemic. 

Because cannabis companies don’t have a lot of access to banking services now, the industry is one that is forced to operate practically on a cash-only basis, especially at the retail level. During a time when hard currency can carry with it novel coronavirus contamination, removing cash transactions from daily life as much as possible has become a public-health goal for all kinds of companies. It makes little sense that cannabis companies can’t have the same goal.

Approval of the HEROES Act would be a hugely beneficial game changer for the industry’s role in any economic recovery ahead. And because the relief plan’s SAFE Banking Act reduces the industry’s reliance on contaminated cash, it's not hyperbole to say it also would save lives, too.

Even if this act dies for a second time, lawmakers are going to have to revisit its concerns soon. Businesses, and now lives, depend on it.