Marijuana: Proposed federal bill seeks to give pot businesses banking access
Even though medical marijuana businesses are legal at the state level, they still are illegal under federal law. And while this raises the spectre of federal law enforcement coming down on Colorado businesses, the bigger concern revolves around banking. Since banks are monitored federally, they do not like to do business with enterprises that are not legal on the federal level. This means that the millions of dollars coming in from the marijuana industry in this state are usually coming through cash transactions.
Senator Pat Steadman proposed a bill last year in the Colorado Legislature aimed at correcting this growing problem, but it met with no success. And there's been no proposal at all on the federal level -- until now.
U.S. Representatives Ed Perlmutter (who represents Colorado's seventh district) and Denny Heck (Washington), along with a bipartisan group of sixteen other Republicans and Democrats (a complete list is at the bottom of this post), submitted a bill this morning to update federal banking rules.
"We need to address the public safety, crime and lost tax revenue associated when these legal and regulated businesses are operating in a cash-only system," Perlmutter said in a release. "We also need to provide financial institutions assurance that they can make their own business decisions related to legal, financial transactions without fear of regulatory penalties or criminal prosecution."
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The Marijuana Business Access to Banking Act would disallow federal regulators from punishing or penalizing a financial institution for providing services to marijuana-related businesses and exempt marijuana-related business accounts from reporting requirements intended to identify individuals engaged in federally illegal activities.
"This bipartisan legislation is a clear and uncontroversial solution to serious problem facing business owners, state regulators, and tax collectors," Aaron Smith, executive director of the National Cannabis Industry Association, said in a statement. "Providing much-needed clarification to financial institutions will not only make it easier for our industry to continue paying the hundreds of millions in taxes and governmental licensing fees we pay each year, it will protect public safety by ensuring the industry isn't forced into a cash economy. This is not about whether marijuana should or shouldn't be legal -- it simply addresses the existing crisis that puts the lives of business owners at risk."
Currently, MMJ businesses pay their taxes, rent, payroll and just about everything else with cash, which has created hurdles for businesses starting up and increases the threat of being punished for illegal activity. Cash-only sales also limit transactions; no credit cards are allowed.
If passed, this bill would affect the nineteen states and the District of Columbia that have all legalized medical marijuana, as well as Colorado and Washington, which have legalized both recreational and medical marijuana.
Co-Sponsors include Jim McDermott (WA), Earl Blumenauer (OR), Jared Polis (CO), Adam Smith (WA), Sam Farr (CA), Derek Kilmer (WA), James Moran (VA), Eleanor Holmes Norton (DC), Michael Capuano (MA), Suzan DelBene (WA), Mike Coffman (CO), Diana DeGette (CO), Peter DeFazio (OR), Alan Lowenthal (CA), Chellie Pingree (ME) and Dana Rohrabacher (CA).
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