Congress May Consider Legislation Allowing Banks to Service the Cannabis Industry
The measure would prevent banks servicing canna-businesses from being punished.
Published on June 6, 2017

One of the thorniest problems facing cannabis companies is the fact that all banks are federally prohibited from dealing with funds connected to the sale of an illegal drug. Because of this, cannabis startups must deal with sales, payrolls, taxes, and expenses using cash only, causing a number of financial headaches as well as putting these companies at greater risk of robberies.

Legislators have floated a number of possibilities to establish protections for banks willing to deal with state-legal canna-businesses. The most recent of these is a proposed measure that would prevent federal banking agencies from punishing financial services providers that create accounts for canna-businesses that are fully legal under state laws.

Congressmen Matt Gaetz and Darren Soto have proposed the measure as an amendment to the Financial CHOICE Act of 2017, a bill that would strip away many of the regulations of the 2010 Dodd-Frank legislation, which was enacted to protect the country from financial crises like the 2008 stock market crash.

The House Rules Committee will meet to set the rules for the act on Tuesday, and will decide on whether or not to include the amendment to the bill at that time. Legislators have had some success attaching marijuana-related riders to other bills, such as the rider that blocks the Justice Department from spending federal funds to interfere with state-legal marijuana programs, which has been attached to annual appropriations bills since 2014.

Advocates believe that if the panel approves the Gaetz-Soto amendment, it stands a good chance of passing. A similar canna-banking amendment attached to a Treasury Department appropriations bill passed with strong bipartisan support in 2014, but ended up not being included in that year's final spending bill. Since 2014, six more states have legalized recreational marijuana and six other states have legalized medical marijuana, and the increased nationwide support for cannabis legalization will hopefully inspire legislators to approve the amendment.

Chris Moore
Chris Moore is a New York-based writer who has written for Mass Appeal while also mixing records and producing electronic music.
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