Proposed law would address current federal restrictions that prohibit banks interacting with hemp, cannabis and marijuana businesses.
Colorado Gov. Jared Polis unveiled a plan through which he seeks to have the federal government increase the number of financial institutions conducting business with the legal marijuana industry.
U.S. Rep. Ed Perlmutter, a Democrat who represents the northern and western suburbs of Denver, joined Polis at the Feb. 10, press conference for announcing the new legislation, “Roadmap to Marijuana Banking and Financial Services.” The legislation was sponsored by Perlmutter, and the legislation’s aim is to protect financial institutions from being punished for transacting with the legal marijuana businesses within Colorado.
Polis said that federal prohibitions on marijuana have forced banks to rejects opening accounts for marijuana businesses, blocking them from accessing financial services. The lack of banking opportunities and other financial services in the states is a significant economic threat. It also serves as a public safety threat because many marijuana businesses are operating on a cash basis, making them vulnerable to attacks by thieves and other criminals.
Polis further said businesses not only in Colorado but the whole of the U.S. need certainty regarding federal rules, and it is their responsibility to do what they can with the tools they have to fix it.
State’s Plan Could
Be National Model
According to a statement, the Roadmap to Marijuana Banking and Financial Services presented by Polis features seven main areas of focus. These include providing clear regulatory guidance, encouraging new and emerging technologies in the financial services sector, minimizing barriers, and upholding consumer protection rights as well as providing state support for commercial businesses looking to explore marijuana banking.
The bill is accompanied by another document which calls for a 20% increase in the number of banks transacting with marijuana companies by June 30. This is one of the goals the state is tracking through an online tool.
For each provision in the plan, the documents describe its strategy, policy action, and status of those objectives.
One of the goals of the plan is to provide financial institutions doing businesses with legal marijuana businesses with guidance and protection.
Another objective of the plan is for the Colorado attorney general to provide legal guidance under the Money Transmission Action and the Trust Companies Act on service provision as well as guiding the consumers and the cannabis industry. Currently, Colorado is conducting an assessment of the specific issues that need to be addressed, and officials are hopeful that by the spring of 2020, they would have gotten the guidance.
Federal Clarity Lacking
The Executive Director of the Colorado Department of Regulatory Agencies Patty Salazar said that Colorado financial institutions are afflicted by uncertainty and apprehension to provide financial services to state-legal marijuana businesses due to lack of federal clarity. Through the roadmap, banks and credit unions can explore whether or not to offer financial services to the marijuana industry.
During the press conference, Perlmutter, who sponsored the SAFE Banking Act, said that Colorado had been a leader of marijuana banking issues from the start, and with the roadmap presented by the governor, it remains a leader.
Perlmutter further said that he is optimistic about the legislation being approved by the Senate Banking Committee and the full chamber. Mike Crapo, R-Idaho, the Banking Committee chair, highlighted some of the amendments he wanted to make as well as those suggested by industry stakeholders.
Industry watchers think that much of the industry is optimistic that with or without federal support, states where marijuana is legal will eventually work out a viable solution to the banking bottleneck faced by the industry.