Senators Call for Cannabis Banking Reform

Senators Call for Cannabis Banking Reform

A bipartisan group of Senators sent a letter to the head of the Financial Crimes Enforcement Network (FinCEN), encouraging national regulators to take action to offer state-legal cannabis businesses access to banking services.

Banking has long been a thorn in the side of cannabis company owners. Since cannabis remains a federally illegal Schedule I drug, most national banks won’t allow state-licensed cannabis businesses to open account. Some smaller state-chartered banks and credit unions are quietly banking cannabis businesses, but the oversight and reporting required by FinCEN make it almost cost-prohibitive.

Because of this, cannabis businesses have to deal almost entirely in cash. That leaves businesses vulnerable to thefts and break-ins. This isn’t only a significant concern for the businesses and their employees. Additionally, it poses a significant danger to clients and jeopardizes the safety of the community.

The lawmakers were led by Oregon Senator Jeff Merkley. His letter included signatures from several prominent politicians from both sides of the aisle. Sen. Elizabeth Warren, who had her hands forced on the matter from the current legalization in Massachusetts, signed to the letter. So did two other lawmakers from newly legalized countries, Sen. Angus Kaine (D-ME), and Sen. Lisa Murkowski (R-AK).

The letter was prompted by the recent general election, during which eight countries legalized cannabis for medicinal or adult use. Over half of the countries have legalized cannabis for medicinal use, including eight countries (along with the District of Columbia) that legalized for adult use.

The letter makes a compelling argument for the national institution to Permit banking services to be available to state legal cannabis businesses, not just for safety, but for the sake of the federal government:

“Forcing all these direct and indirect businesses to operate in cash not only produces a huge target for offenders, but also complicates the collection of state and federal taxes. The fledgling legal market for marijuana is around $7 billion, a figure that’s dwarfed by the overall billion US market, most of which remains illegal. ”

The letter ends with an urgent call for FinCEN to issue clear guidance on the intricate situation.

In 2014, Sen. Dianne Feinstein (D-CA) and Sen. Chuck Grassley (R-IA) combined forces to call on FinCEN to issue clear guidance.

FinCEN has only ever made one announcement on marijuana-related companies , immediately after the legal market started operating in Colorado. That guidance included advice that put a whole lot of risk on financial institutions, leaving them open to criminal or civil liability. Feinstein’s letter characterized the guidance as “dangerously misleading. ”

The Financial Crimes Enforcement Network has yet to release any financial guidance on cannabis-related businesses since February of 2014.

Published at Tue, 19 Jun 2018 19:28:09 +0000

Posted in: News

Comments are closed.