Last month, a group of congressman set out to provide safeguards for banks seeking to provide services for legal marijuana businesses by introducing the Merkley Amendment to the Senate floor.
On July 23rd, the Senate passed the Merkley Amendment, which would “prohibit federal regulators from discouraging or reprimanding a bank from providing services to marijuana businesses in states where such businesses are legal.” Previously, cannabis companies would have to rely solely on cash transactions, which brought along many safety risks and made it extremely difficult for the government to collect taxes.
“The federal government should not be forcing Oregon’s legal marijuana businesses here in Oregon to carry gym bags full of cash to operate their business,” said Merkley. “This is an invitation to robberies, money laundering, and organized crime. We need to enable our banks to serve these legal businesses without fearing devastating reprisals from the federal government.”
Despite the passing of the Merkley Amendment, a recent decision by the Federal Reserve suggests that the U.S. federal government is still not on board with marijuana banking, or even fair access for a cannabis credit union. On July 30th, the Federal Reserve rejected an application from Denver-based Fourth Corner Credit Union (FCCU) for a “master account.” If approved, the request would have allowed the credit union to operate with other banking services and provide necessary services to marijuana companies in Colorado.
Since the ruling, FCCU filed a lawsuit in Denver against the Federal Reserve Bank and the National Credit Union Administration to see that they get a fair and impartial hearing on their request for a master account.
Colorado has Fourth Corner’s back. John Hickenlooper, Colorado’s Governor, has publicly backed the credit union and has been outspoken about the need for marijuana businesses to have access to banks. Colorado approved the credit union’s state license last year, making it the world’s first ever marijuana-friendly financial institution. The credit union, however, cannot open its doors until it has approval from the federal government.
The Federal Government’s indecisiveness has caused much uncertainty and restlessness for cannabis companies that are still operating on a cash-only basis. This, however, will be a long fought battle. With everyone’s eyes on the federal courts and overwhelming support for the cannabis industry, the feds may have to come to a resolution between legal marijuana companies and federal banking regulators sooner than they expected.