Since California first legalized medical marijuana in 1996, legal weed companies have been stuck in the financial dark ages. Even with medical or adult-use legalization laws on the books in 33 states, banks have continued to cower behind federal prohibition, refusing accounts from businesses even tangentially associated with cannabis.
But 2019 is a new year, and with a newly-cemented Democratic majority in the House of Representatives, the legislature is poised to step in and solve the legal weed industry’s banking problem.
According to Forbes reporter and Marijuana Moment proprietor Tom Angell, a subcommittee of the House Financial Services Committee led by the committe’s chairwoman, Rep. Maxine Waters, will convene a hearing entitled “Challenges and Solutions: Access to Banking Services for Cannabis-Related Businesses” on February 13th. And there’s reportedly plans already in the works to bring a full-scale cannabis banking bill to the House floor in the coming months.
“We warned that forcing these businesses to deal in cash was threatening public safety,” Rep. Denny Heck (D-WA) told Mr. Angell. “Chairwoman Waters has made it one of her first priorities to address this urgent and overdue issue, demonstrating that she understands the threat to public safety and the need for Congress to act.”
Over the past two years, as banks around the country have resisted working with cannabis businesses, testing labs, and other weed-related accounts, Democratic lawmakers have tried to advance legislation to fix the problem. Unfortunately, they’ve repeatedly run into roadblocks from Republican leadership in the House.
Without banks willing to take in their deposits, a huge number of cannabis businesses are left to do business, pay employees, and file taxes in piles of cash, with no security or insurance covering their profits. Furthermore, canna-businesses cannot declare bankruptcy due to the financial restrictions.
Last year in California, lawmakers proposed a plan where a state-run banking institution would handle cannabusiness funds. But after jumping through initial hoops, Golden State representatives abandoned the idea, citing complications with federal drug laws.
Hopefully, the newly left-leaning House of Representatives can help reign in the cannabis industry’s cash overflow issue once and for all. We will continue posting updates on this topic as more developments occur. Stay tuned.
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