by Anthony Hennen
Appeals to federal lawmakers to pass cannabis banking reforms fell on deaf ears, leaving a business sector more exposed to risks of theft and violence than it needs to be, advocates say.
Those advocates of reform include a number of Pennsylvania Republican officials.
As The Center Square previously reported, eight state Senate Republicans urged U.S. Sen. Pat Toomey to support the SAFE Banking Act. The act would help cannabis-related businesses access banking and financial services. Currently, they operate in cash, making them potential targets of crime.
Though the bill passed several times in the U.S. House, it couldn’t gain traction in the Senate. The bill failed to advance this session and was also left out of the omnibus spending bill. The Pennsylvania General Assembly passed its version of a SAFE Banking Act, but federal prohibitions on marijuana still keep away finance and insurance companies, who are wary of the risk that could follow from state leniency, but federal restrictions.
In other states with more-developed cannabis industries, the crime threat isn’t abstract. The businesses’ cash-heavy models have attracted unwanted attention.
A report from Stop the Drug War noted an “unprecedented surge in armed robberies of cannabis stores” that began in November 2021 in Washington state. All in all, 100 robberies over 5 months affected 80 cannabis stores and left three people dead.
Expanding banking access for cannabis businesses, it argues, can drive down those sorts of robberies.
“Based on current incentives, there is little reason to believe that robberies targeting the back of a store will continue (as opposed to burglaries), or continue at the same level, if cash is removed from the equation,” the report noted. “The great majority of such robberies are aimed at accessing cash in the safe, and without cash or with much less of it, that will no longer be lucrative.”
Most robberies were after cash, not the marijuana products on sale. Early police intervention could also play a role.
“It’s really about investigating and identifying the perpetrators because it’s a relatively small number of people doing multiple robberies,” said David Borden, executive director of Stop the Drug War. “So if (police) are not following up on even low-priority robberies, they may be missing the opportunities to stem the problem.”
Profit margins for businesses matter as well. If taxes are reasonable, businesses can invest in their security to make robberies less likely.
“It really looks like the ability of the business to spend effectively on their security makes a difference,” Borden said.
The west coast has had more robberies than the east coast. In Pennsylvania, no analysis has been carried out to determine the number of cannabis robberies, but one armed robbery occurred in October 2021 at a medical cannabis shop in Bethlehem Township.
Federal action may happen during the next legislative session, and Toomey’s retirement won’t be a roadblock. His replacement, Democrat John Fetterman, has been an outspoken advocate for marijuana reform and legalization.
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Anthony Hennen is a reporter for The Center Square. Previously, he worked for Philadelphia Weekly and the James G. Martin Center for Academic Renewal.
Photo “Medical Marijuana” by O’Dea. CC BY-SA 4.0.