U.S. Rep. Troy Carter (D-LA) is hoping to provide more opportunities for legitimate cannabis businesses to access capital and grow the industry.
“I have heard about the challenges of those awarded licenses in the industry around gaining access to capital,” said Carter during a Sept. 13 session of the three-day Benzinga Cannabis Capital Conference held in Chicago. “Just getting the award of a license is only one part of it; being able to stand up your business and move it forward is yet another.”
And while many legitimate marijuana business license holders today have a lot of optimism about the growing industry, their concerns about accessing capital and resources that allow them to bank and to borrow are also major priorities. “These are real issues,” said Carter, who is in his first term as a member of Congress.
During the conference session entitled, “Unleashing Investment & Lending Opportunities: New Legislation to Ensure Access to Capital for Our Industry,” Carter discussed his bipartisan bill, the Cannabis Lending and Investment in Marijuana Businesses (CLIMB) Act, H.R. 8200.
The congressman sponsored H.R. 8200 on June 23 with lead original cosponsor U.S. Rep. Guy Reschenthaler (R-PA) to amend any applicable federal law to permit access to community development, small business, minority development, and any other public or private financial capital sources for investment in and financing of cannabis-related legitimate businesses.
H.R. 8200 also would amend the Securities Exchange Act of 1934 to create a safe harbor for national securities exchanges to list the securities of issuers that are cannabis-related legitimate businesses, according to the text of the bill.
“By clarifying what historically has been a little bit of a gray area, we can boost our economy and help not just license businesses, but allow them to access the capital they need to stand up businesses on their own two feet and allow them to thrive,” said Carter during the conference session.
In outlining his proposed legislation, Carter noted that the CLIMB Act goes beyond what is proposed in the bipartisan, bicameral Secure and Fair Enforcement (SAFE) Banking Act of 2021, H.R. 1996/S. 910, which would generally prohibit a federal banking regulator from penalizing a depository institution for providing banking services to a legitimate cannabis-related business.
The U.S. House of Representatives’ version of the SAFE Banking Act, introduced by U.S. Rep. Ed Perlmutter (D-CO) in March 2021, currently has 180 cosponsors. The House overwhelmingly approved the measure in April 2021, but it has stalled since then and remains under consideration in a U.S. Senate committee.
“SAFE Banking is obviously a strong tool, and the CLIMB Act augments that critical proposal to create yet another opportunity to achieve safe harbor for business owners to access capital and thrive in the cannabis industry,” Carter said.
For instance, along with providing access to capital, the CLIMB Act would permit public agencies like the Small Business Administration to provide financial support to the cannabis industry, and provide access to the American public capital markets, explained the congressman.
During the conference, Rep. Carter also said it’s important to note that he and Rep. Reschenthaler are working in a bipartisan fashion on the bill to highlight that “this isn’t a partisan issue.”