WASHINGTON – Marijuana businesses, which face security risks by transporting cash in duffle bags, praised lawmakers Thursday for the first step by the U.S. Senate to give them access to banking services.
Colorado’s U.S. senators, Michael Bennet, a Democrat, and Cory Gardner, a Republican, announced the bipartisan legislation that would give marijuana businesses the ability to access bank accounts, accept credit cards and write checks, to name a few services largely denied to the cannabis industry.
“In the short term, it sends a message that this is a legitimate industry that’s being taken into account by the highest levels of government,” said Brian Vicente, an attorney who has represented many in the cannabis industry of Southwest Colorado. “Longer term, it’s a phenomenal step forward for one of Colorado’s fastest-growing industries to tackle problems of transparency and the day-to-day challenges involved in not having access to these services.”
Marijuana businesses operating in states with legal marijuana have largely been denied access to banking systems because banks fear they can be prosecuted under federal law. Marijuana remains illegal on the federal level. As a result, cannabis businesses have operated with cash, raising security and accounting concerns.
“Since the legalization of both medical and recreational marijuana in Colorado, businesses across the state have lacked access to basic banking services,” Bennet said. “This has raised significant public-safety concerns for both employees and customers of these businesses. It’s also created compliance and oversight challenges. This bill helps address those issues by allowing our banking system to serve these legal businesses like any others.”
Colorado lawmakers passed legislation to establish credit unions for the marijuana industry. But the effort has faced its own problems navigating federal banking hurdles.
“America has historically relied on states to be laboratories of democracy. As marijuana is legalized in states across the country, the federal government has a duty to ensure that this experiment can proceed safely,” said Gov. John Hickenlooper, a Democrat. “That’s why this bill is so important to Colorado: Providing marijuana businesses access to banking will protect the safety and well-being of our residents.”
Similar legislation has been introduced in the U.S. House. Rep. Scott Tipton, R-Cortez, has not co-sponsored the legislation yet, but a spokesman said the congressman would consider voting for the bill.
The Senate bill would prevent federal banking regulators from prohibiting, penalizing or discouraging a bank from providing financial services to a legitimate state-sanctioned and regulated marijuana business. The federal government also would be prohibited from terminating or limiting a bank’s federal deposit insurance solely because the bank is providing services to a state-sanctioned marijuana business. Regulators also would not be allowed to push a bank to halt providing banking services to cannabis businesses or take any negative action against a marijuana-related loan.
“Providing access to basic banking services for legitimate cannabis businesses should be a no-brainer,” said Aaron Smith, executive director of the National Cannabis Industry Association. “Without banks, many of our members are forced to operate entirely in cash, which puts their employees at risk for crime and creates massive challenges for businesses simply trying to pay their taxes, licensing fees and other ordinary expenses.”
Mariam Baksh is a student at American University in Washington, D.C., and an intern for The Cortez Journal.