A new bipartisan U.S. Senate bill would make it easier for state-legal marijuana businesses to access banking services.
Out of fear of violating current money laundering and drug laws, many banks are reluctant to do business with marijuana providers. As a result, most marijuana dispensaries operate on a cash-only basis, making them targets for robberies.
“Without banks, many of our members are forced to operate entirely in cash, which puts their employees at risk for crime and creates massive challenges for businesses simply trying to pay their taxes, licensing fees and other ordinary expenses,” said Aaron Smith, executive director of the National Cannabis Industry Association, in a press release. “The legal marijuana industry is worth nearly $3 billion nationwide. We shouldn’t be forced to carry that around in duffel bags.”
The legislation, introduced by the full Senate delegations of Colorado and Oregon, along with one senator each from Kentucky and Washington State, would provide banking institutions with a safe harbor by preventing federal regulators from punishing them just for doing business with the marijuana industry.
Last year, the Obama administration released guidance intended to make it easier for banks to do business with cannabis sellers, but many financial industry leaders remain wary. They say that until federal law actually changes — as opposed to relying on nonbinding memos that could be changed by this or future administrations — they’re going to stay away. The new Senate proposal, and a similar bill introduced in the House earlier this year, are intended to provide the clarity and comfort that the banking industry says it needs.
“Small, legal businesses should not be turned away from banking services because of fear of unjustified federal prosecution, and this legislation will ensure that they have access to the same services as other small businesses and can continue to grow and succeed,” said bill cosponsor Sen. Patty Murray (D-WA).
Colorado Gov. John Hickenlooper (D) offered praise for the legislation. “As marijuana is legalized in states across the country, the federal government has a duty to ensure that this experiment can proceed safely,” he said in a press release. “That’s why this bill is so important to Colorado: Providing marijuana businesses access to banking will protect the safety and well-being of our residents.”
Under current law, federal officials can punish banks that do business with the marijuana industry by terminating their FDIC insurance or seizing their assets. That would no longer be possible if the new legislation were enacted.
“It’s time to let banks serve these legal businesses without fearing devastating reprisals from the federal government,” said Sen. Jeff Merkley (D-OR), a cosponsor of the bill.