(NEW YORK) -- Purveyors of legal marijuana are cautiously applauding a Democrat-backed Senate bill to end the federal prohibition of pot, saying their businesses have been stymied by banking regulations that force them to deal in cash and make them a target for thieves.
For the first time in history, some Senate Democrats introduced a bill to decriminalize marijuana at the federal level and remove cannabis from the federal list of controlled substances -- laws that led to more than 1.5 million arrests in 2019 alone, 32% of which were for nonviolent lower-level marijuana possession offenses, according to the nonprofit Drugpolicyfacts.org.
Federal laws have also created a legal gray area for businesses operating in states where marijuana is legal.
The Cannabis Administration and Opportunity Act is backed by Senate Majority Leader Chuck Schumer, D-N.Y., who called the legislation "monumental."
But some cannabis industry insiders told ABC News that while the draft legislation includes many things that would greatly benefit dispensaries and growers -- like allowing them to get bank financing, accept credit cards and go public on the New York Stock Exchange -- they would rather see the federal government leave the issue in the hands of states.
"I hope I'm dead wrong, but the cynic in me says why would a Democratically-controlled Congress want to put a legalization bill in front of a president from their party who has already said he doesn't want to sign a legalization bill?" Kyle Kazan, the CEO of American cannabis production and distribution company Curaleaf, told ABC News.
Kazan also worries about federal involvement because of the damage done by the war on drugs.
Despite Schumer's support for the bill, President Joe Biden still opposes federal legalization of marijuana, White House press secretary Jen Psaki said on Wednesday and the measure would need several Republicans to support it to pass.
'Excited' but staying 'realistic'
The legislation, co-sponsored by Senate Finance Committee Chairman Ron Wyden, D-Ore., and Sen. Cory Booker, D-N.J., would aim to expunge criminal records of most nonviolent marijuana offenses and create banking systems to help cannabis businesses, specifically hundreds of small and minority-owned companies wanting in on the so-called marijuana green rush.
Headset, a provider of data and analytics to the cannabis industry, forecast this week that the U.S. legal cannabis market will surpass $30 billion in sales in 2022.
The legislation, now in its early draft stage, would also allow states to craft their own cannabis laws, as states do with alcohol. A new federal excise tax would also be created similar to alcohol and tobacco.
The proposal would also clear the way for U.S. marijuana companies to use banking services, including holding bank accounts and taking out loans and allow companies to list on U.S. stock exchanges. Currently, cannabis companies do not have access to the banking system because their product is illegal in the eyes of the federal government.
Despite his doubts, Kazan, a former California police officer, said he would love to see the legislation pass, but have the federal government largely leave the details to the states.
"As much as I am cheering for Cory Booker and Chuck Schumer and (Senate Minority Leader) Mitch McConnell to come together on something, I think it would be best if they just said, 'Let's get the hell out of the way and let the states do it,'" said Kazan, whose company trades on the Canadian Stock Exchange. "The federal government has only done harm here with the war on drugs and the war on cannabis. You have tens of thousands of people that are serving hard time for nonviolent cannabis and other drug crimes. Just stop doing harm."
Steve DeAngelo, a co-founder of Harborside Health Inc., a California cannabis company that also trades on the Canadian Stock Exchange, told ABC News that the legislation has been a long time coming.
"I'm excited. But I also want to be realistic about it," said DeAngelo, who has been dubbed the father of the legal cannabis industry. "But it's a great day when the Senate majority leader comes out supporting comprehensive legalization of cannabis at the federal level. That is a great day for our movement."
To date, 18 states have legalized the recreational use of marijuana and 37 states, along with the District of Columbia, Puerto Rico, Guam and the U.S. Virgin Islands, now allow the medical use of the drug.
A Pew Research Center Poll released in April showed that 91% of U.S. adults say marijuana should be legal for medical and recreational use.
DeAngelo cofounded a medical marijuana business in Northern California as a non-profit more than a decade ago and said it's been an uphill climb ever since due to conflicts with federal regulations listing marijuana as a Schedule 1 drug with narcotics as heroin.
"Most successful businesses in the United States have an ability to go to a bank and get financing for a variety of uses at a reasonable interest rate. Cannabis businesses aren't able to go to banks and get any type of financing," DeAngelo told ABC News.
"When we're trying to ... just operate in an efficient way and do things like paying our taxes, those same banking laws can require us to do crazy things like go into tax offices with hundreds of thousands of dollars in cash in order to pay our back taxes," he added. "Things aren't safe or efficient."
An increasing target for thieves
Having to have large amounts of cash on hand to do business and shelves stocked with high-grade cannabis, dispensaries and grow operations have increasingly become alluring targets for robbers.
In San Francisco last week, a group of robbers stormed a cannabis dispensary in the city's Potrero Hill neighborhood, overwhelmed a security guard and took his gun before ransacking the business and making off in multiple getaway vehicles with boxes of marijuana, police said. On June 17, an attempted robbery at a pot dispensary in the Highland Park neighborhood of Los Angeles led to a shootout in front of the business that left a security guard critically wounded and one of the suspects dead, according to police there.
"It's been a huge problem. People have died because of this," DeAngelo said.
He said that allowing cannabis businesses to accept credit cards would help eliminate the need to have large amounts of cash on hand.
"That's one of the good things that this will do," he said of the legislation.
McConnell, the powerful Republican from Kentucky, has said he opposes the Senate bill, which will need 60 votes to pass, including 10 Republican votes.
DeAngelo said that if he had a chance to speak with McConnell, he'd say, "cannabis isn't harmful but cannabis prohibition is." He noted that during the COVID-19 pandemic many cities in states where recreational cannabis is legal designated pot dispensaries essential businesses along with pharmacies.
"They need to abandon old and outdated ways of thinking about cannabis," DeAngelo said.