The barriers that have long blocked Pot Inc. from access to banking services may soon crumble, setting the stage for exponential growth in the $50 billion cannabis business, On The Money has learned.

At this point, the key barrier is GOP opposition — mainly in the US Senate — to legislation known as the SAFER Banking Act that would create a “safe harbor” for marijuana, meaning big banks can finally lend money to any business that touches weed.

But wait a minute, isn’t pot in its various forms — from joints, to gummies to gels and ointments — already legal in just about every state and recently, after President Trump’s executive order in December, also OK in the eyes of the federal government?

That, it turns out, is a complicated question. True, most states have decriminalized weed, and some have made it 100% legal. But Trump’s recent EO didn’t legalize pot on the federal level; it just made it less illegal. It’s still a Schedule 3 controlled substance, meaning that it’s no longer in the category of heroin, but at least in the eyes of the feds, it still isn’t on par with aspirin or cough medicine.

That means Pot Inc. still can’t set up an account at JPMorgan or get access to credit card services, much less lending or listing on a US stock exchange. Banks are regulated on the federal level, meaning unless DC totally legalizes weed, bringing it down to a Schedule 4 or 5 drug, big banks won’t touch it. 

As long as that is the case, any company that touches the so-called plant must be financed more expensively by smaller lenders and, if it wants to go public, list its shares overseas, thus stunting the growth of Pot Inc.

A workaround is the Safer Banking Act, which would shield banks from any legal liability from lending to Pot companies or underwriting weed stocks. It has faced intense opposition particularly in the GOP Senate — until maybe now. Last week, I interviewed Tim Scott, the GOP senator from South Carolina and chairman of the Senate Banking Committee who suggested the opposition — including his own — may be waning.

“There’s something called the Safer Banking Act, which is to allow for the banking question to be solved,” Scott told me during an interview at the Milken Global Conference. “The answer to the access to the banking system is that Congress is going to have to make it legal.”

Scott’s main concern is that you don’t want to create a nation of stoners. Weed, he says, is today “300% stronger than it was” back when Cheech and Chong began making pot acceptable for recreational use back in the 1970s.

But pot isn’t just for stoners. Weed is used increasingly for its medical benefits and for pain relief, the reasons president Trump classified it down to a schedule that allows for prescriptions.

Full disclosure: I won’t smoke the stuff because I hate being high, but I used weed-infused gel on my sore shoulder and it worked. Plus, it’s now a $50 billion business and growing despite the banking hurdles, meaning the money that can be regulated and taxed is being funneled to god knows where.

Or in Scott’s words: “The other part of the quandary is that what you don’t want is to have a situation where you have these cash rooms, where you have hundreds of thousands of dollars of cash sitting in a location because everyone knows you can’t bank it.” Such a situation, he said, foments “criminal activity … So there is a quandary that we have to solve. I think we’ll get to a solution.”

The Safer bill resides in the House of Representatives. It hasn’t been introduced to the full Senate probably because majority Leader John Thune is still an opponent (His office didn’t respond to a request for comment).

Marc Cohodes, a former hedge-fund manager and investor in Glass House Brands, a major California-based cannabis-cultivation business, makes a good point: “The Mob used to run sports gambling until it was legalized. Having money laying around in dispensaries in an industry that employs lots of people is bad policy, dangerous and wrong-headed.”