Appropriations Committee Could Establish Groundwork for Cannabis Banking

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WASHINGTON, D.C. A new federal spending bill could solve two lingering issues for legal cannabis.

The Appropriations Committee in the House of Representatives has included language in a new spending bill that would provide legal protection for banks working with the cannabis industry. The bill would prevent the Treasury Department from prosecuting financial institutions working with cannabis businesses that are not operating in violation of state law.  

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“None of the funds made available in this Act may be used to penalize a financial institution solely because the institution provides financial services to an entity that is a manufacturer, a producer, or a person that participates in any business or organized activity that involves handling marijuana, marijuana products, or marijuana proceeds, and engages in such activity pursuant to a law established by a State, political subdivision of a State, or Indian Tribe,” Sec. 633. of the bill reads.

The lack of banking impacts the cannabis industry in several key ways. For one, keeping cash and cannabis products under the same roof may increase the risk of theft for dispensaries. This also could pave the way for debit and credit card transactions to purchasing cannabis products. Many dispensaries still operate as cash only. Additionally, eliminating the reliance on cash may actually increase transparency and make overseeing shops easier for regulators.

“Cannabis companies shouldn’t be punished for employing millions of American workers and contributing billions of dollars to the economy,” said Terry Holt, spokesperson for the National Cannabis Roundtable, an organization that advocates reform of federal cannabis laws. “This is an important step toward ensuring access to banking services for the thousands of businesses who are inevitably intertwined with lawful and regulated cannabis businesses.”

Another proposal by the Appropriations Committee could finally allow recreational cannabis sales to begin in the District of Columbia. D.C. residents voted to legalize adult-use cannabis in 2014, but the large shadow cast by Congress on local city politics has prevented any solid plan to regulate sales from taking form.

There seems to be momentum building in Congress for significant cannabis reform. The 2018 Agricultural Improvement Act, better known as the farm bill, was passed late last year, legalizing industrial hemp. This week, Senator Kirsten Gillibrand (D-NY) introduced her plan for cannabis legalization. Her plan also calls for banking reform as well as changing the tax code in order to allow cannabis businesses to take advantage of many small business deductions that currently are off limits. Her plan would also legalize the drug nationwide and expunge the criminal records of all non-violent cannabis crimes.

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