One of the constant problems for businesses in state-legal cannabis industries is the lack of access to banking services. We’ve covered the issues this causes far more than once, as this matter continues to sit on the back-burner for Congress. Due to the current cash-only nature of the industry, businesses all over the country have hundreds of thousands of dollars on hand at any given time and armored trucks transport millions around the states and around the country to get taxes paid – all of which could be avoided with the simple luxury of access to a bank.
Lead by Pennsylvania’s Wolf Administration, a group of top financial regulators in 13 states are demanding Congress act to protect banks who choose to work with cannabis businesses from any federal interference – giving them the peace of mind they need to work with the newly legal industry.
“We urge Congress to consider legislation that creates a safe harbor for financial institutions to serve a state-compliant business, or entrusts sovereign states with the full oversight and jurisdiction of marijuana-related activity,” states the letter from Secretary of Banking and Securities Robin L. Wiessmann. State banking officials from Alaska, Connecticut, Hawaii, Louisiana , Michigan, Montana, Nevada, New York, Oklahoma, Oregon, and Washington state also signed the letter.
The letter supports the passage of the STATES Act, which is a bill that would amend the Controlled Substances Act to create an exemption for state-legal cannabis-related activity. This would not only protect businesses and consumers from federal interference, but it would also protect banks, who have been somewhat reluctant to assume current protections passed under a spending bill are extended to them as well.
“A majority of states now have medical marijuana programs and it has become increasingly necessary to craft policy to respond to emerging challenges in this rapidly growing industry,” the new letter from financial regulators concludes. “We must work together to look for solutions rather than avoiding this challenge and ignoring the new policy landscape.”
According to research by Steve Schain, a Philadelphia-based cannabis banking attorney, less than 0.03 percent of the country’s nearly 12,000 financial institutions are willing to work with anyone whose money comes from a state-legal cannabis industry. Roughly 70 percent of businesses that directly deal with the cannabis plant (growers and dispensaries) are lacking access to banking, while close to 50 percent of ancillary businesses (indirectly related to cannabis) are also denied banking services.
Since medical marijuana was legalized, this problem has only gotten worse. And now, more than 30 states allow medical marijuana and 9 allow recreational cannabis. With the spread of state-legal cannabis showing no signs of stopping any time soon, the federal government needs to start looking at the dangers they are forcing on those in the industry and realize they are the only ones who can do something about it.