Advertisement
Business

Open banking system to the cannabis industry, 33 attorneys general urge

FILE - This Oct. 20, 2018, file photo shows marijuana clone plants displayed for sale by Interstate
Many cannabis businesses can operate only in cash — sometimes vast amounts — making them ripe targets for crime.
(Richard Vogel / Associated Press)

Attorneys general from 33 states on Wednesday urged Congress to approve a proposal intended to fully open the doors of the U.S. banking system to the legal marijuana industry.

Most Americans live in states where marijuana is legally available in some form. But most banks want nothing to do with money from the cannabis industry for fear it could expose them to legal trouble from the federal government, which still considers marijuana illegal.

“This is simple: not incorporating an $8.3 billion industry into our banking system is hurting our public safety and economy,” said California Atty. Gen. Xavier Becerra, whose state is the nation’s largest legal pot shop.

The bill “would reward taxpayers and small and local licensed businesses who play by the rules,” he said in a statement.

Advertisement

The conflict between state and federal law has left many growers and sellers in the burgeoning pot industry in a legal dilemma, shutting them out of everyday financial services such as opening a bank account or obtaining a credit card. It also has forced many businesses to operate only in cash — sometimes vast amounts — making them ripe targets for crime.

Plans for a state-backed pot bank aren’t feasible, a study says »

The pending bill would allow pot businesses to access loans, lines of credit and other banking services and would shelter financial institutions from prosecution for handling money that is linked to pot.

In a letter to congressional leaders, the attorneys general also argue that under existing law, authorities are less able to track potential financial crimes and that it is more difficult for businesses to pay tax deposits — and for states to collect those tax deposits.

Advertisement

The number of banks and credit unions willing to handle pot money is growing, but they still represent only a tiny fraction of the industry.

One of the bill’s sponsors, Rep. Ed Perlmutter (D-Colo.), said the endorsement from the state officials “underscores the need to respect states’ rights on this issue and make our communities safer by allowing the marijuana industry and related businesses access to the banking system.”

Along with California, states signing the letter included attorneys general from Alaska, Arizona, Arkansas, Connecticut, Colorado, Delaware, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Utah, Vermont, Virginia, Washington, West Virginia, and Wisconsin.

It was also signed by attorneys general from the District of Columbia, Guam, the Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands.


Advertisement