Marijuana Banking Law

The Assembly Financial Institutions and Insurance Committee passed the bill from Assemblymember Verlina Reynolds-Jackson (D) with nearly unanimous support on Monday.

The bill would not immunize banks that service state-legal cannabis businesses from being penalized under federal law, but the committee action comes as congressional leaders are planning to file legislation that’s expected to contain those broader safeguards.

This situation is common for a “cannabis-related legitimate business or service provider” (CRLB) operating in New Jersey and other states, because the federal government classifies marijuana as a Schedule 1 controlled substance, creating a conflict in authority. Schedule 1 classification defines marijuana as having (i) a high potential for abuse, (ii) no currently accepted medical use, and (iii) no accepted safety standards for its use under medical supervision.

House leadership confirmed on Friday that a bipartisan marijuana banking bill will receive a floor vote next week despite objections from several leading advocacy groups who want broader justice-oriented cannabis reforms to advance before what they see as an industry-focused proposal.

The Secure and Fair Enforcement (SAFE) Banking Act, which cleared the Financial Services Committee in March, will be voted on through a process known as suspension of the rules, requiring two-thirds of the chamber (290 members) to support it for passage.

Everyone needs to pay their fair share of taxes, including the cannabis industry. But there is nothing fair about how the federal government treats cannabis under an outdated provision put into the Internal Revenue Service tax code decades ago. It’s fueling the underground market for weed and reducing the tax revenues the federal government should collect.

Attorneys General from 38 U.S. States and five Territories are calling on Congress to pass to the “SAFE Banking Act” that will allow legal marijuana businesses access to the massive U.S. banking system. SAFE stands for Secure And Fair Enforcement.

This bipartisan group sent a letter to congressional leaders Thursday, saying they want to move the $8.3 billion marijuana industry into the regulated banking sector where its money can be better monitored. They noted that many marijuana businesses transact in cash, making revenue tracking and taxation more difficult for states.

Rest assured that the cash that patients pay at local medical marijuana dispensaries doesn’t end up under a mattress.

“We do have a bank,” said Jimil Wilson, chief financial officer for Maitri Medicinals, which operates Fayette County’s only state-approved medical marijuana dispensary in Uniontown.

So does Washington County’s only medical marijuana dispensary, The Healing Center in Washington.

We are in a time of unprecedented growth and rapid change for the cannabis industry across the U.S. As we look ahead at issues in the law at both the Oregon state and federal levels, here are five changes we see on the horizon.

1. Access to Banking.

U.S. Senator Bob Menendez has introduced legislation that will allow legal cannabis businesses to access banking services.

Menendez’s proposal will help medicinal or recreational marijuana businesses legal under state laws to gain access to banking services. Under Menendez’s plan, cannabis-related companies can have bank accounts, accept credit cards and write checks – avoiding the need to operative with large amounts of cash.

The bill will also help local and state governments collect taxes.

• Asked about the Fed's thoughts on the cannabis space, Chair Jerome Powell says further regulatory guidance would be helpful.
• "I think it would be great to have clarity," Powell says. "It puts financial institutions in a very difficult place and puts the supervisors in a difficult place, too."
• Marijuana remains illegal on a federal level in the United States, but 10 states and the District of Columbia have allowed its use for recreational purposes.

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.