States want safe harbor for FIs serving legal cannabis industry
A bipartisan group of state attorneys general is urging Congressional leaders to enact legislation that would allow marijuana dispensaries to participate in the U.S. banking system.
In a letter, AGs from Alaska, California, Colorado, Hawaii, North Dakota and the District of Columbia outlined the dilemma faced by cannabis outlets in 29 states and several territories that have legalized marijuana for medical use and eight states that have legalized the drug for recreational use:
Industry analysts report that [cannabis] sales grew by 30 percent to $6.7 billion in 2016 and expect those totals to exceed $20 billion by 2021. Yet those revenues often exist outside of the regulated banking space.
Businesses are forced to operate on a cash basis. The grey market makes it more difficult to track revenues for taxation purposes, contributes to a public safety threat as cash intensive businesses are often targets for criminal activity, and prevents proper tracking of large swaths of finances across the nation.
The AGs asked for legislation that would provide a safe harbor for depository institutions to serve cannabis-related businesses in states and territories where they operate legally under state law.
Under current federal law any financial institution or ATM deployer with ties to the legal cannabis industry could be subject to criminal and civil action by the U.S. Justice Department.
In recent weeks, U.S. Attorney General Jeff Sessions rescinded Obama-era guidance that called for the department to de-prioritize enforcement of federal marijuana statutes in states where possession was legal.
In response, a bipartisan coalition of U.S. Representatives introduced legislation that would block punitive action directed at banks serving the marijuana industry and defund Justice Department activity aimed at overriding marijuana-related state laws.