The Subcommittee on Consumer Protection and Financial Institutions held a hearing last week titled: “Challenges and Solutions: Access to Banking Services for Cannabis-Related Businesses.” The focus of the hearing was a draft of Representatives Ed Perlmutter (D-Colo.), Denny Heck (D-Wash.), Steve Stivers (R-Ohio) and Warren Davidson’s (R-Ohio) SAFE Banking Act, which establishes a safe harbor from federal sanctions for financial institutions that serve cannabis-related businesses in states where cannabis has been legalized at the state level.
We strongly believe Congress should address the conflicts between federal and state law in those states that have legalized marijuana use in some form. Of course, that includes Oklahoma.
The OBA has never taken a position on whether to support full legalization of marijuana, even though the drug has been legalized for medical or adult use in 33 states. What the Association does support, however, is resolving the conflicting laws for financial institutions that choose to bank both direct cannabis businesses as well as ancillary businesses which, under current law, present banks with a number of legal and regulatory risks.
Meanwhile, ABA President and CEO Rob Nichols submitted an op-ed which appeared in “The Hill” magazine this morning:
“Washington had a turning point in the national debate over banking and cannabis this month. For the first time, Congress held a hearing on the issue, with lawmakers and witnesses outlining the harm resulting from the growing gap between state and federal laws. The House Financial Services hearing was welcome but overdue.
Today, 33 states and the District of Columbia have legalized cannabis in some form, and more states are now moving to join that club. At the federal level, however, marijuana remains illegal, putting banks in an impossible situation only Congress can resolve.
With cannabis now legal in 33 states and the District of Columbia, an overwhelming number of banks – 99 percent, according to a recent ABA survey – want Congress to take action to address the gap between state and federal law that prevents banks from serving marijuana-related businesses in states that have legalized the drug.
Three in four ABA member banks reported having had to close an existing account, terminate a banking relationship or turn away a potential customer because of a connection to cannabis. As a result, many marijuana-related businesses have resorted to dealing entirely in cash, which can make them lucrative targets for criminals and create potential public safety risks for local communities.
While ABA is not taking a position on the legalization of marijuana, reconciling the cannabis conundrum would allow the profits from cannabis sales — which are estimated at $24 billion by 2025 — to be safely deposited within regulated financial institutions. But we welcome the discussion on this bipartisan legislative proposal led by Rep. Ed Perlmutter (D-Colo.) to address the issue of cannabis and banking. It’s an important first step toward bringing cannabis-related businesses into the mainstream financial sector.
Read the op-ed by clicking here.
Click here to read the discussion draft of the SAFE Banking Act.
Click here to read the ICBA position paper
Click here to read ABA’s Statement For The Record.