Barbara Lee
Rep. Barbara Lee Inquiring About Barriers to Capital for Minority Cannabis Businesses
“As momentum for marijuana decriminalization continues, FinCEN data could help shed light on the state of minority-owned and small cannabis businesses (which constitute businesses with revenues under $40 million) seeking financial services,” the lawmakers wrote. “Existing disparities in access to capital and financial services for individuals and businesses increase financial barriers and exacerbate the racial wealth gap, further harming those most harmed by the failed War on Drugs.
By Sean Ryan
Representatives Barbara Lee (CA-13) and Earl Blumenauer (OR-03) sent a letter on Wednesday to the Financial Crimes Enforcement Network (FinCEN) requesting recent data on the financial services offered to minority cannabis businesses in an effort to better understand the barriers faced by minority cannabis businesses owners.
Minority cannabis entrepreneurs often cite a lack of access to capital and financial services as a major barrier to entering the legal cannabis industry. A 2021 Brookings Institution report revealed that Black-owned businesses faced more disparities in access to banking services and deposits, mortgage credit, and small business loans than their white counterparts.
These alarming findings were further substantiated by a 2021 Federal Reserve report that found that Black and Latino-owned businesses were less than half as likely as their white counterparts to be fully approved for loan applications.
“As momentum for marijuana decriminalization continues, FinCEN data could help shed light on the state of minority-owned and small cannabis businesses (which constitute businesses with revenues under $40 million) seeking financial services,” the lawmakers wrote. “Existing disparities in access to capital and financial services for individuals and businesses increase financial barriers and exacerbate the racial wealth gap, further harming those most harmed by the failed War on Drugs.
They continued, “Given the increasing momentum of cannabis legalization and much-needed clarity from the federal government, Congress must devise a federal solution to equitably end the cannabis prohibition and encourage industry growth.
As we work to invest in the communities disproportionately harmed in the failed War on Drugs, FinCEN data on access to financial services could help promote equitable access to financial services for small and minority-owned cannabis businesses.
“We welcome the opportunity to work with FinCEN to ensure Congress is equipped with the critical data needed to effectively address equity concerns when crafting solutions to end the federal cannabis prohibition.”
Representatives Lee and Blumenauer serve as the Democratic co-chairs of the Congressional Cannabis Caucus.
Sean Ryan is the communications director in the media relations office of Rep. Barbara Lee.
