Advocates and those in Congress who have long been clamoring for cannabis reform are expected to get their first swing today at solving the biggest hurdle faced by the increasing number of state-legal cannabis businesses squirming to operate under federal prohibition.
Up for discussion at the US House’s Consumer Protection and Financial Institutions Subcommittee is whether Congress can intervene and push more banks to accept deposits from cannabis businesses. Even though a 2014 U.S. Treasury memo gave something of a go-ahead for financial institutions to work with cannabis businesses by providing specific guidance on how to do so, regulatory challenges and the underlying risk of working with businesses that remain illegal under federal law have left most cannabis businesses struggling to find financial partners.
Many operate and pay their bills, along with state and federal taxes, in cash.
A new bill would create a “safe harbor” from prosecution for banks who do business with state-legal cannabis operators, according to draft legislation circulated before the hearing.
It’s unknown how the newly-elected Democratic House, whose members largely support national legalization, want to legislate on cannabis. A fresh crop of new Democratic members have promised bold, progressive swings on climate change, gun control and voting rights. Today’s subcommittee hearing begs the question of whether members ultimately want to take a different tact on cannabis, perhaps offering a politically pragmatic solution that could help businesses immediately and have a better chance at passing the GOP-controlled Senate.