Federal Bill Would Legalize Banking for the Pot Industry

marijuana bankingSure weed’s legal in a few states and many more have legalized it for medical purposes, however banks and credit unions still fear working with the marijuana industry. Because federal law technically supersedes state law, the banking industry is afraid that they may either face prosecution from the federal government for lending to legal marijuana businesses. They could be found guilty of money laundering and lose their FDIC insurance. However, a bill introduced in the Senate last week could put an end to this last major roadblock.

The entire legal landscape that legal marijuana currently faces is “insane,” said GOP Sen. Cory Gardner of Colorado in an interview. “If you’re an employee or a store owner you can’t put money in the bank, but if you’re a municipality collecting tax you can collect the tax, you can put it in the bank and you can spend it. This is insane,” Gardner said.

Marijuana businesses provide excise, sales, and local tax revenue that states use to bridge budget gaps and support the education system. In fact Colorado injected $13.6 million into their public school system in the first five months of 2015 from taxing pot. But without the benefits of banking services weed businesses are forced to run cash-only businesses—a safety risks for the business itself and the surrounding community.

“I know shop owners who dig holes in their yards to hide the money, Dylan Donaldson, owner of Karing Kind, a legal marijuana shop in Boulder, Colorado told the Denver Post. “We have stash houses and armed escorts.”

Oregon Senator Ron Wyden who along with three other senators who introduced the bill agreed, “It’s ridiculous to make any business owner carry duffel bags of cash just to pay their taxes,” Wyden said in a press release. His colleague Oregon Senators Jeff Merkley along with Colorado Senators Michael Bennet and Cory Gardner  introduced the bipartisan bill in the U.S. Senate on July 9. “It solves a public safety issue, it clarifies a regulatory nightmare and it clears up a pretty blatant hypocrisy,” Gardner told Politico.

The new bill, The Marijuana Business Access to Banking Act of 2015, would essentially decriminalize the act of providing banking services to legal marijuana businesses and would protect banks from being penalized by the federal government. It would prevent federal banking regulators from:

  • Prohibiting, penalizing, or discouraging banks from providing financial services to legitimate state-sanctioned and regulated marijuana businesses.
  • Terminating or limiting a bank’s federal deposit insurance solely because the bank is providing services to a state-sanctioned marijuana business.
  • Recommending or incentivizing a bank to halt or downgrade banking services to legal marijuana businesses.
  • Taking any action on a loan to an owner or operator of a marijuana business.
weed and banking
The Marijuana Business Access to Banking Act of 2015 would decriminalize the act of providing banking services to legal marijuana businesses

The bill also shields banks and bank officers from criminal prosecution, liability, and asset forfeiture. However this isn’t the first banking legislation aimed at providing relief to the cannabis industry in recent history. Three U.S. Senators introduced the CARERS Act in the Senate earlier this year. It was designed not only to free banks from the fear of penalty or prosecution when dealing with legal marijuana businesses it would have also decriminalize weed on a federal level and reschedule medical marijuana. However it never made it out of Congress. And similar legislation that would have allowed banks to service the legal marijuana industry was introduced in the House of Representatives last year as well. That bill failed to even make it onto the committee hearing calendar.

Does this new bill have a chance of passing? “I think there’s a lot of work that has to be done to give it that chance, but I also think that in 10 years most every other state in the country is going to be facing this question,” Sen. Cory Gardner of Colorado told Politico. “People are coming on board and people are starting to realize we have a policy that’s kind of out of step.”

Do you think this bill will pass and allow banks to work with cannabusinesses? Let us know in the comments below.

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