WASHINGTON—A group of senators are urging the Treasury to ease restrictions on financial institutions that serve the legal cannabis industry and provide guidance to encourage more banks and CUs to support this trade—particularly those that provide services to state-sanctioned pot businesses.
The roadblock in front of many banks and credit unions serving the legal cannabis industry is that in states where selling marijuana is legal, federal law still classifies pot as a Schedule I dangerous and illegal drug.
Last week Senator Jeff Merkley (D-OR) and nine other U.S. Senators, including Republican Lisa Murkowski of Alaska, sent a letter to the Treasury Department’s Financial Crimes Enforcement Network’s acting director, Jamal El-Hindi, urging the regulator to issue further guidance to financial institutions on providing services specifically to businesses that “do nothing more than provide services to the state-sanctioned marijuana industry,” 24/7 Wall St. reported.
The impact affects even those businesses that have an indirect relationship to legal marijuana.
“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,” the senators wrote. “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.”
The Senators also warn that the banking restrictions are “an invitation to tax fraud, robberies, money laundering, and organized crime,” 24/7 Wall St. reported.