Tag: cannabis banking

WA: House Judiciary Committee Approves Measure Explicitly Allowing Financial Institutions to Work with Marijuana Industry

A Washington bill to give explicit permission to financial institutions to provide services to licensed marijuana businesses has been approved by the state’s House Judiciary Committee.

The bipartisan House Bill 2098 was filed by Representative David Sawyer (D), and is cosponsored by Representatives Brandon Bick (R), Steve Kirby (D) and Cary Condotta (R). The measure “Provides immunity from state criminal prosecution to a financial institution providing financial services to licensed marijuana businesses and qualifying patients, health care professionals, and providers under medical marijuana laws.”

For purposes of the bill, “financial institution” is defined as “a bank, trust company, mutual savings bank, savings and loan association, or credit union authorized to do business and accept deposits in Washington under state or federal law. Financial institutions are generally regulated by the Department of Financial Institutions.”

The full text of House Bill 2098 – which was approved by the House Judiciary Committee by a vote of 10 to 3 – can be found by clicking here.

About Anthony Martinelli

Anthony, co-founder and Editor-in-Chief of TheJointBlog, has worked closely with numerous elected officials who support cannabis law reform, including as the former Campaign Manager for Washington State Representative Dave Upthegrove. He has also been published by multiple media outlets, including the Seattle Times. He can be reached at TheJointBlog@TheJointBlog.com.

Senators Sanders, Warren, Booker and Others Join Forces in Calling for Cannabis Banking

A group of U.S. senators have sent a letter to the Treasury Department’s Financial Crimes Enforcement Network urging the government to allow cannabis banking.

cannabis bankingThe bipartisan group of senators that sent the letter include Senators Bernie Sanders (I-VT), Elizabeth Warren (D-MA), Cory Booker (D-NJ), Lisa Murkowski (R-AK), Jeff Merkley (D-OR), Angus King (I-ME), Ron Wyden (D-OR), Kirsten Gillibrand (D-NY), Patty Murray (D-WA) and Al Franken (D-MN).

“The majority of legal marijuana businesses, and businesses that provide services to them, are all but barred from participating in the financial system,” states the letter. “As a result, many legal businesses are forced to operate in cash, which jeopardizes community safety.”

According to the group; “This business environment is an invitation to tax fraud, robberies, money laundering and organized crime. A large number of professionals have been unable to access the financial system because they are doing business with marijuana growers and dispensaries.”

The full letter can be found below, and by clicking here:

December 14, 2016

Jamal El-Hindi

Acting Director

Financial Crimes Enforcement Network

P.O. Box 39

Vienna, Virginia 22183

Dear Acting Director El-Hindi,

As you know, this past election saw eight states vote to allow or expand some form of legal marijuana use, bringing the grand total to 29 states and jurisdictions in the United States. Yet, in these states, the majority of legal marijuana businesses, and businesses that provide services to them, are all but barred from participating in the financial system. As a result, many legal businesses are forced to operate in cash, which jeopardizes community safety, limits economic growth, and greatly expands the opportunity for tax fraud. We urge you to issue further guidance to financial institutions on their ability to provide services, specifically to indirect businesses that do nothing more than provide services to the state-sanctioned marijuana industry.

We want to thank FinCEN and the Department of Justice for issuing guidance clarifying reporting requirements, enforcement priorities and providing clarity to state-legalized marijuana businesses and the financial services industry. However, the 2014 FinCEN guidance did not distinguish between state-sanctioned marijuana businesses and the indirect businesses that service the marijuana industry, leaving it up to individual financial institutions to determine how to classify and treat indirect businesses. Limitations on access to financial services have become increasingly problematic for legal businesses and will only present a larger problem as more states legalize marijuana, either for recreational or medical uses. Indeed, since FinCEN’s 2014 guidance was released, less than 3% of the nation’s 11,954 federally regulated banks and credit unions have chosen to serve the cannabis industry.

Most banks and credit unions have either closed accounts or simply refused to offer services to indirect and ancillary businesses that service the marijuana industry. A large number of professionals have been unable to access the financial system because they are doing business with marijuana growers and dispensaries.

This long list of professionals includes chemists who have had their checking accounts closed due to their role in testing marijuana for the presence of harmful materials like arsenic; the security industry, which marijuana businesses heavily rely on due to the massive amounts of cash they handle; and lawyers offering legal services to marijuana businesses, who have reported banks denying applications for bank accounts and credit cards. 

To be clear, these legitimate, indirect businesses have been unable to open checking accounts and accept credit cards or checks. In some cases they have also lost access to existing accounts, such as retirement accounts, and have been forced to pay their employees, taxes, and bills in cash. Locking lawyers, landlords, plumbers, electricians, security companies, and the like out of the nation’s banking and finance systems serves no one’s interest.

Forcing all these direct and indirect businesses to operate in cash not only creates a huge target for criminals, but also complicates the collection of state and federal taxes. The fledgling legal market for marijuana is around $7 billion, a figure that’s dwarfed by the overall $50 billion US market, most of which remains illegal.[2] This business environment is an invitation to tax fraud, robberies, money laundering, and organized crime.

With tens of millions of Americans soon gaining legal access to marijuana under state laws, new guidance is necessary in order to allow banks to enhance the availability of financial services for indirect businesses that service the marijuana industry. This will not only bolster the safety of our communities, but it will also help to spur economic growth across the country. We urge FinCEN to issue such guidance without delay. 

About Anthony Martinelli

Anthony, co-founder and Editor-in-Chief of TheJointBlog, has worked closely with numerous elected officials who support cannabis law reform, including as the former Campaign Manager for Washington State Representative Dave Upthegrove. He has also been published by multiple media outlets, including the Seattle Times. He can be reached at TheJointBlog@TheJointBlog.com.

E-mail Leak Reveals Clinton’s Marijuana Debate Prep, in Support of Marijuana Banking

A new Wikileaks e-mail leak shows how presidential candidate Hillary Clinton was prepared to respond to certain marijuana-related questions in the most recent debatedeb, including her position on whether banks should be allowed to do business with marijuana companies. The e-mails were part of a hack of John Podesta, Clinton’s campaign chair.

One of the e-mails states:

“If pressed: what about marijuana banking restrictions – should we let marijuana businesses access banking services?

• I do think these businesses – if they are operating in according with state law, and with federal guidelines – should be able to access banking services. I know that the Obama Administration has taken steps in this direction, and I think those steps are smart.

• Not having access to banking services can force legal and licensed businesses to deal in cash, making their stores a target for theft. Cash-only operations also are more difficult to audit. I will continue to evaluate the steps the Administration had taken, to determine if we should go further.”

“While YOU should avoid saying marijuana accounts for a signification portion of the U.S. correctional population, or a significant portion of those behind bars for drug offenses,” states one of the e-mails, “it IS correct that there are hundreds of thousands of arrests for marijuana crimes, and that there are thousands of people serving (some) time for marijuana crimes – many of whom would likely be better off in their communities.”

Unfortunately there were no cannabis-related questions asked at the debate. There’s still hope, however, as there is one more presidential debate happening on Wednesday.

About Anthony Martinelli

Anthony, co-founder and Editor-in-Chief of TheJointBlog, has worked closely with numerous elected officials who support cannabis law reform, including as the former Campaign Manager for Washington State Representative Dave Upthegrove. He has also been published by multiple media outlets, including the Seattle Times. He can be reached at TheJointBlog@TheJointBlog.com.