The U.S. House on July 16 passed a measure meant to block penalties on banks that provide financial services for marijuana businesses.
A bipartisan amendment to the annual Financial Services appropriations bill prevents the Treasury Department from using funds to penalize financial institutions that provide services to marijuana businesses that operate in states like Colorado, where pot sales are legal.
Even though many states now allow retail or medical marijuana sales, the drug is still illegal under federal law. That results in legal pot businesses having to resort to cash-only transactions because many banks won’t do business with them, out of fear of federal prosecution.
“Passage of this amendment is a positive step forward for financial institutions and for legitimate marijuana businesses,” said U.S. Rep. Ed Perlmutter, through an emailed statement. Perlmutter was one of the sponsors of the amendment.
“Legal marijuana businesses are subject to greater risks and penalties because they do not have access to the banking system. We need to bridge the gap between state and federal law in order to reflect the reality of the situation in a growing number of states.”
Perlmutter is also the sponsor of a separate piece of legislation that would give explicit legal clearance for banks to do business with pot stores. However, that legislation doesn’t look to be going anywhere this year.
Congress’ inaction on marijuana banking issues prompted state lawmakers to pass a bipartisan bill at the Legislature this year that allows pot businesses to enter into banking co-operatives.
In spite of state lawmakers’ efforts, “(marijuana) banking needs a federal solution,” said Michael Elliott, executive director of Colorado’s Marijuana Industry Group.
“A lack of basic banking services such as checking and merchant services has caused serious public safety and accountability issues that arise from this being a cash-dominant industry,” Elliott said.