Some in Congress are Still Trying to Open Banking Service to Canabis Businesses

 As California joins the list of states that have legalized recreational marijuana, limited access to banking services continues to be a problem for producers, retailers, and other businesses in this rapidly growing sector. Because marijuana businesses cannot, in most cases, open bank accounts, accept credit cards, or make electronic payments, the sector remains largely cash based, with all the drawbacks that entails. The problem is felt by businesses that deal in medical as well as recreational cannabis.

Charlie Wilson, whose company Green Bits provides management and compliance services to marijuana-related business, puts it this way in a recent post for The Hill:

There is overwhelming evidence that electronic transactions are more secure, faster and more transparent than dealing only in cash. Yet this highly regulated industry is more difficult to monitor precisely because it is all cash. And oversight will only become more difficult with continued rapid growth and as more states legalize cannabis.

Several attempts have been made to remedy the situation. In April, Rep. Ed Perlmutter (D-CO), along with several co-sponsors, introduced the Secure and Fair Enforcement Banking Act (SAFE Banking Act), a reintroduction of legislation that had been introduced but languished in earlier Congresses. There was some hope that provisions of the act would be folded into the recently passed tax bill, but that did not happen. Not to be discouraged, just before Christmas, Rep. Andy Barr (R-KY) introduced a similar bill, the Industrial Hemp Banking Act, as stand-alone legislation.

All of these bills seek to remove federal barriers to provision of banking services. Among other provisions, they would prevent the FDIC from denying deposit insurance to banks that service cannabis-related businesses, prevent federal banking agencies from penalizing banks that conduct such businesses, and make it easier for banks to accept cannabis-related assets as collateral for loans.
Safe banking for marijuana businesses is a bipartisan cause, as the sponsorship of the above-cited bills makes clear. Now what is required is to translate popular support for legalization into Congressional action. As Marijuana Majority points out, “Bad laws change when good people speak up.”

Reposted from Niskanen Center