Indopedia All Things Marijuana
The lack of access to banks and financial institutions is one of the largest challenges that American canna-businesses face today, and as the industry continues to expand, a growing number of pro-cannabis lawmakers have stepped up with possible solutions. This Wednesday, the House Appropriations Committee held a heated debate over the amendment, with 19 lawmakers standing up to argue for or against the banking protections. The committee supported these protections with a strong vote, but Joyce’s attempt to push the Safe Banking Amendment had no such luck. Joyce revised the amendment, creating a new version which only protected banks dealing with medical, not recreational marijuana. After a short debate, Chairman Rodney Frelinghuysen demanded that Joyce withdraw the measure three times, and Joyce eventually acquiesced. “Once these companies have an easier time conducting their day-to-day operations, then they should be willing to offer more consumer-friendly prices instead of inflating them at the point of sale to cover backend costs associated with operating as an all-cash business.”
It seems unlikely that this amendment will have a chance of success this year, but other legislation currently in the works may offer a partial solution to canna-banking.
The STATES Act would also modify federal law so that funds connected with state-legal cannabis operations would no longer be considered illegal drug proceeds, allowing banks to service these industries without being subject to prosecution for money laundering.
“Most financial institutions will be looking for even more affirmative direction from [Washington] to feel comfortable with banking cannabis companies,” she added. Even if the act passes, banks who choose to serve the cannabis industry would still face a number of risks. Julie A. Hill, professor at the University of Alabama School of Law, explained that the Bank Secrecy Act, which requires that banks learn about their customers well enough to ensure they are not money launderers, could also pose a problem. “The bank would likely have to confirm that the marijuana is not sold to minors or sold for transport to states where it is illegal,” and the cost of conducting this research would be an additional expense for banks.
