Merkley, Daines Lead Senate Introduction Of Bipartisan Legislation To Ensure That Legal Cannabis Businesses Aren’t Shut Out Of Critical Financial Services

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DISTRICT OF COLUMBIA: Oregon’s U.S. Senator Jeff Merkley and U.S. Senator Steve Daines (R-MT) today introduced the bipartisan Secure and Fair Enforcement (SAFE) Banking Act, which would ensure that legal cannabis businesses have access to critical banking services.

Most state legal medicinal or recreational cannabis businesses are denied access to the banking system because banks fear they may be prosecuted under federal law given the ongoing federal restrictions on cannabis. The lack of access to bank accounts, credit cards, and checks have forced state legal cannabis businesses to operate in cash, opening the door to tax evasion and to a dangerous pattern of robberies, including one that resulted in the murder of a store clerk in Portland.

Giving state legal cannabis businesses access to banking services would not only improve community safety, but also make it easier for Americans of color—who have long been disproportionately impacted by America’s racist ‘War on Drugs’ policies and generations of asset-stripping policies and practices—to access the capital necessary to participate in the merging cannabis industry.

“No one working in a store or behind a register should have to worry about experiencing a traumatic robbery at any moment,” said Merkley. “That means we can’t keep forcing legal cannabis businesses to operate entirely in cash—a nonsensical rule that is an open invitation to robbery and money laundering. Let’s make 2021 the year that we get this bill signed into law so we can ensure that all legal cannabis businesses have access to the financial services they need to help keep their employees safe.”

“Montana businesses shouldn’t have to operate in all cash—they should have a safe way to conduct business,”Daines said.“My bipartisan bill will provide needed certainty for legal Montana cannabis businesses and give them the ability to freely use banks, credit unions and other financial institutions without the fear of punishment. This in turn will help increase public safety, reduce crime, support Montana small businesses, create jobs and boost local economies. A win-win for all.”

To address the safety concerns resulting from these state legal businesses being shut out of banking services, the SAFE Banking Act would prevent federal banking regulators from:

  • Prohibiting, penalizing or discouraging a bank from providing financial services to a legitimate state-sanctioned and regulated cannabis business, or an associated business (such as an lawyer or landlord providing services to a legal cannabis business);
  • Terminating or limiting a bank’s federal deposit insurance solely because the bank is providing services to a state-sanctioned cannabis business or associated business;
  • Recommending or incentivizing a bank to halt or downgrade providing any kind of banking services to these businesses; or
  • Taking any action on a loan to an owner or operator of a cannabis-related business.

The bill also creates a safe harbor from criminal prosecution and liability and asset forfeiture for banks and their officers and employees who provide financial services to legitimate, state-sanctioned cannabis businesses, while maintaining banks’ right to choose not to offer those services. The bill also provides protections for hemp and hemp-derived CBD related businesses.

The bill would require banks to comply with current Financial Crimes Enforcement Network (FinCEN) guidance, while at the same time allowing FinCEN guidance to be streamlined over time as states and the federal government adapt to legalized medicinal and recreational cannabis policies.

Momentum around the SAFE Banking Act reached new heights in the 116th Congress, when the U.S. House of Representatives passed the legislation, and included it in the HEROES Act.

The legislation is cosponsored by U.S. Senators Kyrsten Sinema (D-AZ), Edward J. Markey (D-MA), Alex Padilla (D-CA), Patrick Leahy (D-VT), Richard Durbin (D-IL), Ron Wyden (D-OR), Mazie Hirono (D-HI), Tina Smith (D-MN), Angus King (I-ME), Catherine Cortez Masto (D-NV), Michael Bennet (D-CO), Robert Menendez (D-NJ), Jon Tester (D-MT), Jacky Rosen (D-NV), Kevin Cramer (R-ND), Dan Sullivan (R-AK), Kirsten Gillibrand (D-NY), Elizabeth Warren (D-MA), Chris Murphy (D-CT), Gary Peters (D-MI), Bernie Sanders (I-VT), Brian Schatz (D-HI), Patty Murray (D-WA), Amy Klobuchar (D-MN), Rand Paul (R-KY), Bill Cassidy (R-LA), Cynthia Lummis (R-WY), and Lisa Murkowski (R-AK).

Last week, the legislation was introduced by Representatives Ed Perlmutter (D-CO-7), Nydia M. Velázquez (D-NY-07), Steve Stivers (R-OH-15), and Warren Davidson (R-OH-08) and over 100 of their colleagues in the U.S. House of Representatives.

Full text of the legislation is available here.

Colorado Raises $150 Million From Marijuana. Will More States Legalize?

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COLORADO: Colorado has brought in more than $150 million in marijuana tax revenue, according to official state data.

That doesn’t make it a budgetary panacea, warn lawmakers.

“The big lesson we tell other states is you probably shouldn’t legalize marijuana if you want to make money – that’s not why you do it,” said J. Skyler McKinley, deputy director of the governor’s Office of Marijuana Coordination, to the Huffington Post. “You do it because you think that a regulated marketplace might be safer than an unregulated marketplace, or you believe that the war on drugs didn’t work.”

Rising Marijuana Sales Leave Pot Shops Flush With Cash They Can’t Deposit

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OREGON:  Two months from now, on July 1, Oregon will become the fourth state to allow residents to legally purchase marijuana for recreational use. In anticipation of legalization, the governing body that will oversee marijuana licensing and sales is preparing for something unexpected: A huge influx of cold, hard cash.

Legal marijuana in states like Colorado and Washington have surpassed revenue expectations in their first few years. But when marijuana businesses try to pay their taxes, the federal law that makes marijuana illegal limits their access to financial institutions.

Despite assurances from the Treasury Department that they would not be prosecuted, banks have been reluctant to open accounts for weed-related businesses. Some banks that accept money generated by marijuana sales fear that they may leave themselves open to federal money-laundering charges.

 

Pot Problem: Banks Still Don’t Want This Cash

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COLORADO:  The Fourth Corner Credit Union was created to serve the pot industry. It got state approval back in November, but is still waiting for a green light from the Federal Reserve. That typically takes weeks, not months for a new bank to get.

Recreational pot is legal in four states and D.C., and medical marijuana is legal in 19 other states. The hitch: Marijuana is still illegal on the Federal level, which also regulates banks.

That leaves pot shops in states like Colorado, where it’s legal, in a bind. Many banks won’t offer them accounts, leaving them stuck with piles of cash and nowhere to put it. Fourth Corner wants to change that.

‘High-Growth, High-Risk Industry:’ Marijuana Businesses Still Struggle To Find Banks

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WASHINGTON:  As the recreational and medical cannabis market blooms in Washington state, trepidation surrounding banking remains a major hurdle for financial institutions and pot businesses alike.

In Washington state, there are only five or six institutions that loan money or finance marijuana retail stores, said Robert McVay, an attorney with the Canna Law Group.

Banks deal with more regulators than any other industry in the country, McVay said.

And that makes it hard for large financial institutions to get involved in an industry that is still illegal under federal law. Bank of America, VISA and others won’t touch the industry.

U.S. Startups Jumping Headfirst Into The Marijuana Industry

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WASHINGTON: The next great American gold rush is upon us. Vast, open land awaits the right eager businessperson to stake out their plot of land. This time, the gold is green — and the products include plastic baggies, vaporizers and mobile apps.

Yes. The marijuana industry is where the opportunities are. (More coverage of the emerging industry from AOL Jobs contributor David Rheins.)

Those getting into the marijuana industry today are getting a leg up on the growing wave of competition. The New York Times recently covered the industry that is now receiving financial backing from several networks of investors that are ready to plunge millions into the industry. A concurrent Times editorial series called for the legalization of marijuana.

At this point, the widespread legalization of marijuana looks now to be more of a ‘when’ rather than an ‘if’. Personal convictions aside, the numbers don’t lie. Debates can arise over whether Colorado’s decline in highway fatalities is enough to outweigh the bump in pot DUI arrests in legalized states. However, there is no debate when it comes to facts and figures; Americans love their marijuana.

Pots Of Marijuana Cash Cause Security Concerns

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COLORADO:  The unmarked armored truck rumbles to a stop in a narrow alley, and former U.S. Marine Matthew Karr slides out, one hand holding a folder, the other hovering near the pistol holstered at his hip.

With efficient motions he retrieves a locked, leather-bound satchel from a safe set into the truck’s side and presses a buzzer outside the door. It swings open to reveal a cavernous warehouse filled with marijuana and a safe stuffed with cash.

Welcome to the rear guard of Colorado’s rapidly expanding legal marijuana industry, where eager users pour millions of dollars — most of it in small bills — into buying pot, hashish, and marijuana-infused foods and drinks. All that cash adds up, and there are few places to put it: Federal regulations, which still classify pot as an illegal drug, make it difficult for marijuana producers to deposit their profits into traditional bank accounts.

And those cash-heavy small businesses make awfully attractive — and vulnerable — targets for criminals.

 

Blue Line Protection Group Providing Financial, Security And Compliance To Legal Marijuana Industry

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COLORADO:  Blue Line Protection Group, a leading provider of protection, financial and compliance services to the legal cannabis industry, was featured on the front page of The Denver Post on Sunday, June 15th in the article, “Reluctance of banks leaves pot shops looking for secure practices.”

The article focuses on the unique and uncertain banking issues facing legal marijuana dispensaries in Colorado. Traditional banks have not been willing to offer services to cannabis-related businesses due to the serious compliance issues they face, as it is illegal under federal law to manufacture, distribute or dispense marijuana.

The story highlights “Medicine Man,” a family-owned Denver marijuana business with designs on becoming a national brand that has employed Blue Line Protection Group’s security services since January 1st of this year. In addition to its armed guard security and compliance services, Blue Line is currently working with five Colorado marijuana companies to provide a viable financial solution for lawful cannabis dispensaries and has drawn interest from two Colorado-based banks.

The Denver Post article quoted Dan Sullivan, Blue Line Protection Group’s Vice President of Sales & Training and Andy Williams, Medicine Man’s President & CEO, describing how the two businesses are successfully working together.

Referring to Blue Line Protection Group, the article stated, “The company would serve as a compliance intermediary, an independent third party that would provide banks with data confirming that customers are 21 or older, licensing confirmation, monthly tax income, sales figures and other sensitive information.”

Mr. Sullivan commented, “The banks are saying they won’t do it because it’s an enormous amount of information they don’t possess. A third party, though, could do it for them. Blue Line would transport cash from businesses, store it in its own vault and then take it to a bank processing center.”

Andy Williams said the arrangement would give Medicine Man access to debit cards and checking and the terms were agreeable.

Sean Campbell, Blue Line’s Chief Executive Officer, commented on the article, “Blue Line has developed a proprietary standards and compliance verification program for banks interested in providing services to cannabis-related businesses. This makes Blue Line a natural fit to provide ongoing compliance services and reporting in this industry as we build upon our current suite of services to satisfy federal banking compliance requirements.”

Seattle Credit Union Moves Toward Serving Marijuana Growers

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WASHINGTON: The Seattle-based nonprofit once known as Group Health Credit Union changed its name in 2010 to evoke a green, leafy, hardy plant seen as having medicinal properties.

No, not that one.

But four years later, what is now Salal Credit Union is gingerly stepping into a different field of green by doing business with growers of the cannabis plant.

In an apparent first for Western Washington that could ease fears that truckloads of cash will be a magnet for crime, Salal says openly that it expects to provide bank accounts for some state-licensed marijuana growers and processors.

The credit union plans a “beta test” with a couple of the businesses in the next few weeks, expanding soon to others in King, Snohomish and Pierce counties if all goes well, Salal CEO Russ Rosendal said.