An amendment introduced to the U.S. Senate in early July that would allow marijuana-related businesses in states with legalized cannabis to utilize federally-regulated banking services passed the Senate Appropriations Committee on July 23.
In a near-tie vote of 16-14, members of the committee narrowly approved the amendment that would prohibit the U.S. Treasury Department from taking legal action against banks that provide services to cannabis-related businesses. Three of the approving votes were from Republicans, while Dianne Feinstein of California was the only Democrat to oppose it.
The positive progress of the bill, sponsored by Oregon Democrat Jeff Merkley and Washington Democrat Patty Murray, is evidence that the federal government may be willing to give a nod to state’s rights and even do something positive for the burgeoning cannabis industry. To date, federal authorities have either openly opposed or, at best, been neutral with regard to the wave of cannabis legalization sweeping the nation.
If passed, such a bill would make a tremendous difference to thousands of dispensaries and retail outlets in states like Oregon, Washington, and Colorado — not to mention dozens of other states that regulate medical marijuana production facilities and dispensary networks serving millions of patients.
This amendment isn’t the only effort pending in Congress that would recognize a state’s right to legalize marijuana by permitting banking services to the businesses that serve the industry. The Marijuana Businesses Access to Banking Act of 2015 is a standalone bill that would accomplish the same basic goal. While it is pending in both the House and the Senate, it is unlikely to gain any movement during the current session of Congress.
Thus, in the near term, the amendment being sponsored by Merkley and Murray is the only viable solution to the banking and cashflow headaches that have plagued the marijuana industry since day one.
Passage of such a law would create major opportunities for entrepreneurs and ancillary services in an industry that has been relegated to dealing in cash or cryptocurrency, severely limiting opportunities for investments and compliance with tax regulations. A lack of banking services has also prevented dispensary customers from sliding a debit card at checkout instead of relying only on cold hard cash.
Formal banking services will also decrease the security burden of dispensaries and retail outlets, which current face the threat of theft due to the large amount of cash they handle.
This amendment exemplifies the fact that more than state-level legalization is necessary to allow a robust and thriving network of production facilities, manufacturing companies, medical dispensaries, retail outlets, and third-party service organizations.