Federal statutes create risk for banks that want to operate in the cannabis space. Banks face the threat of civil actions, asset forfeiture, reputational risk, and even criminal penalties if they do business with customers in the cannabis industry. Further, because most banks will not touch cannabis money, the growers, processors, and retailers in the industry must often operate on a cash-only basis. The Internal Revenue Service has even had to build “cash rooms” to accommodate taxes paid by legal cannabis companies. Lawful businesses therefore have to decide between investing heavily in security that other businesses do not need or making themselves easy targets for would-be armed robbers.
That could be changing soon. Last month, the House Financial Services Committee voted 45 to 15 in favor of a bill that would protect banks from punishment by federal regulators for providing financial services to cannabis businesses. Rep. Ed Perlmutter (D-Colo.) introduced the bipartisan SAFE Banking Act, which would prevent federal regulators from punishing financial institutions who provide services to cannabis businesses that are operating legally under state law. During the markup, Rep. Steve Stivers (R-Ohio), offered an amendment to extend the bill’s protections to insurers, which the committee agreed to include. The bill now moves to the House Judiciary Committee for consideration. It has 165 co-sponsors including 17 Republicans.
This month, Sens. Jeff Merkley (D-Ore.), Cory Gardner (R-Colo.), and twenty co-sponsors filed a companion version of the SAFE Banking Act that would shield banks that hold accounts for state-approved marijuana businesses. The bill would require banks to comply with current Financial Crimes Enforcement Network (FinCEN) guidance, while at the same time allowing FinCEN guidance to be streamlined over time as states and the federal government adapt to legalized medicinal and recreational cannabis policies. Both bills are still subject to debate and could undergo substantive changes; industry’s lobbying efforts are far from over. Neither the House bill nor the Senate bill is scheduled for a vote on the floor, but the bills’ sponsors are optimistic.