Senate Vote May Finally Legitimize The Marijuana Business For Banks

By David Konow 06/21/16

Currently, the majority of marijuana businesses do not have bank accounts because marijuana is still federally prohibited.

Senate Vote May Finally Legitimize The Marijuana Business For Banks

With the news breaking last week that Microsoft partnered with marijuana software company Kind Financial, the press hailed it as a major game changer in the pot industry, and it indeed shows that the weed business has come a long way. Yet for an industry that makes billions of dollars, it still can’t get help from banks because of its outdated, outlaw status.

A major stumbling block is that marijuana is still listed as a Schedule I drug, which puts it in the category of the “most dangerous class” of mind-altering substances. Even with marijuana being legal in many states, pot is federally illegal, which could make a bank vulnerable to federal seizures.

So on Thursday, June 16, the Senate Appropriations Committee approved a bill that would protect banks from being punished by the government for working with marijuana businesses.

As the Denver Post reports, there were two previous bills passed by the Senate, one last year and one in 2013, but neither succeeded. Still, there’s hope this time could do the trick. As Washington Senator Patty Murray said in a statement, “This amendment is really about providing clarity, stability and security for our banks, credit unions and small-business owners who want to be able to operate in full daylight.”

There’s certainly a lot of hoops a bank has to jump through to work with a marijuana company, especially making sure that the business is compliant with the laws of the state. Because marijuana businesses can’t rely on banks, it has to deal largely in cash.

A source in the Marijuana Industry Group told the Post that despite the fact that the pot industry generates billions in revenue, “we are denied the access to banking that every other industry enjoys." She added: "Tens of thousands of people who work in the legal cannabis industry as well as service providers have problems banking." According to Inc., 70% of marijuana companies currently don’t have bank accounts.

While one source told Business Insider that this bill isn’t “a watershed moment” in marijuana’s banking struggle, there’s still hope that it could be at least a step towards legitimizing the pot business, and open the doors of America’s banks to it without fear of government reprisal.

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In addition to contributing for The Fix, David Konow has also written for Esquire, Deadline, LA Weekly, Village Voice, The Wrap, and many other publications and websites. He is also the author of the three decade history of heavy metal, Bang Your Head (Three Rivers Press), and the horror film history Reel Terror (St Martins Press). Find David on LinkedIn and Facebook.