A bipartisan group in the U.S. House, including Rep. Don Young, R-Alaska, has introduced legislation to allow marijuana-related businesses in states with existing regulatory structures to access the banking system.
“As a co-founder of the Congressional Cannabis Caucus, one of my top priorities is ensuring marijuana-related businesses have access to the banking system and can operate in accordance with state law,” Young said.
“This legislation is an important step to ensuring marijuana businesses in states that have legalized- who continue to operate in a very uncertain and insecure environment without access to banks or financial institutions – can be treated fairly and as legitimate contributors to state and local economies,” Young said.
“While I do not personally advocate for the use of marijuana, I do support these types of issues as a matter of states’ rights and their ability to determine the nature of criminal activity within their own jurisdictions.”
“With the majority of states now allowing for some form of recreational or medical marijuana, we have reached a tipping point on this issue and it’s time for Congress to Act,” said Rep. Ed Perlmutter, D-CO, the bill sponsor. “Allowing tightly regulated marijuana businesses the ability to access the banking system will help reduce the threat of crime, robbery and assault in our communities and keep the cash out of cartels,” Perlmutter said.
A similar companion bill is expected to be re-introduced in the Senate.
With eight states, including Alaska, and Washington D.C. now allowing adult-use recreational marijuana, and 29 states legalizing medical marijuana, there is a growing effort in Congress to align federal and state marijuana laws, specifically as they relate to the banking issues confronting marijuana-related businesses.
The Secure and Fair Enforcement Banking Act (SAFE Banking Act) would ensure financial institutions can service marijuana-related businesses without fear of reprisal from the federal government.
Currently hundreds of licensed and regulated businesses do not have access to the banking industry and are unable to accept credit cards, deposit revenues, or write checks to meet payroll or pay taxes.
The SAFE Banking Act works to address potential threats to public safety that can happen when small businesses are forced to operate on a cash-only basis.
Currently financial institutions that provide banking services to legitimate marijuana businesses are subject to criminal and civil liability for aiding and abetting a federal crime and money laundering under the Controlled Substances Act and federal banking statutes.
Young said the SAFE Banking Act would remove uncertainty by providing “safe harbor” protections for depository institutions that provide a “Financial product or service” to a covered business.
Federal banking regulators would not be able to threaten or limit a bank or credit union’s Deposit Insurance, take any action or downgrade a loan made to a covered business, or force a depository institution to halt providing any kind of banking services to a marijuana-related legitimate business, Young said.
