Legislation would give some legal cover to banks that cater to the marijuana industry.
The House of Representatives held two bipartisan votes on Wednesday that should open the door for banks and other financial institutions to do business with the marijuana industry.
In one vote, the House passed an amendment that prohibits the U.S. Treasury Department from dipping into federal funds to penalize financial institutions that cater to state-licensed marijuana businesses. A second vote rejected an attempt by John Fleming, a Republican congressman from Louisiana, to reverse previously issued guidance detailing how banks can serve cannabis industry clients without breaking federal laws.
Of course, federal government still outlaws the sale or consumption of the drug. The question is whether businesses that cater to the pot industry are also guilty of crimes.
In February, both the Treasury and the Justice Department released guidelines showing banks how to avoid violating federal anti-money laundering laws when dealing with marijuana businesses. They also explained when banks should report any suspicious activity to the government. At the time, the Justice Department made clear that it would only enforce federal law against state-licensed marijuana businesses and their allies in certain cases involving drug sales to children and in states where marijuana is still illegal.
“This is a huge step forward for the legal cannabis industry,” Aaron Smith, executive director of the National Cannabis Industry Association, said in a statement Wednesday. “Access to basic banking services is one of the most critical challenges facing legal cannabis businesses and the state agencies tasked with regulating them.”
Banks have so far feared doing business with the marijuana industry despite 23 states legalizing medical marijuana and both Colorado and Washington opening up pot sales for recreational use. The result is that most state-licensed medical or recreational marijuana outfits have had a harder time securing loans and have had to deal solely in cash, which creates security problems while making it more difficult for states to tax sales of the drug.
Any legislation would have to be approved by the Senate and then signed by the President before becoming law.