Cannabis Banking Bill Shot Down By Senate

Cannabis Banking Bill Shot Down By Senate

The surging legal marijuana industry could really benefit from traditional access to the banking industry. Unfortunately, the Senate disagrees.

Americans’ support for marijuana legalization has never been higher. More than half of U.S. states legally allow cannabis in some form, and the nation’s current $6.7 billion cannabis industry is projected to balloon to $21 billion just three years from now.

Despite this unprecedented momentum, however, cannabis remains illegal at the federal level, which has forced those in the legal marijuana industry to deal almost entirely in cash. Introduced by Senator Jeff Merkley of Oregon, an amendment attached to a federal finance bill would have given the industry with access to banking services, but it was shot down by a U.S. Senate Appropriations committee on June 21 by a vote of 21-10. A parallel amendment failed in the House the week before.

As we’ve outlined previously, the Federal Deposit Insurance Corporation (FDIC) oversees financial institutions, and since marijuana is classified as a Schedule I drug at the federal level, banks that do business with marijuana companies could expose themselves to money-laundering or racketeering charges under the federal Controlled Substances Act.

In 2014, the Obama Administration issued revised guidelines that loosened the restrictions somewhat, but virtually all banks kept their distance, still fearful of serving canna-businesses. The amendment introduced by Merkley would have protected banks and other financial institutions from legal concerns, but the Senate panel’s no vote keeps both banks and state-legal pot businesses in legal and financial limbo. Until positive legislation is passed, buying — and selling — legal cannabis will be needlessly complicated, and legal marijuana businesses will remain prime targets for violent criminals.  

“The real losers from this action are our communities, who will remain less safe because of the cash that remains on the streets instead of in the bank,” Kenneth Berke, co-founder of cannabis payment and banking technology company PayQwick, told Marijuana Business Daily. “With so much of the country in favor of legal cannabis, it’s mind-boggling that our elected representatives remain unwilling to pass desperately needed legislation.”

Stay tuned to the Sugar Leaf for updates.