Financial Services Access will Mitigate Legal Cannabis Business Risks

The legal cannabis industry does not operate in a vacuum and is dependent on Main Street businesses, CUNA wrote to the House Small Business Committee Wednesday, stressing the importance of protecting companies that directly or indirectly serve these businesses.

“Credit unions and other financial institutions operating in states where cannabis is legal risk serving cannabis-related businesses even without directly accepting them as clients. Indirect connections to cannabis revenue are exceptionally difficult, if not impossible to identify and avoid…Under the existing regime, a credit union or financial institution that does business with any one of these companies would be violating federal law,” the letter reads.

“Without access to mainstream banking services, cannabis businesses and the businesses indirectly related to them are less able to obey the law, pay taxes, and follow state regulations. The public safety risks posed by these businesses are easily mitigated through access to mainstream banking services and keeping the cash off the streets,” it adds.

While CUNA and the state leagues have not taken a position on legalization or decriminalization of cannabis, they support legislation that would protect entities that serve legal cannabis businesses, including both the Secure and Fair Enforcement (SAFE) Banking Act (H.R. 1595; S.1200) and the Strengthening the Tenth Amendment Through Entrusting States (STATES) Act (S.1028).

Eighteen state and two territorial governors added their names to a letter urging Congress to pass legislation to enable financial institutions to provide banking services to state-licensed cannabis businesses. Gov. Phil Murphy was among the twenty signatories on the letter sent last week to U.S. Senate and U.S. House leadership, and the chairs and ranking members of the Senate Banking and House Financial Service committees.

NJ Attorney General Gurbir Grewal and NJ Commissioner of Banking & Insurance Marlene Caride also added their names to colleague letters sent to Congress.

The House version of the SAFE Banking Act passed the House Financial Services Committee in March. The bipartisan bill currently has 206 cosponsors including eight from New Jersey, Reps. Donald Norcross (D-1), Jeff Van Drew (D-2), Tom Malinowski (D-7), Bill Pascrell, Jr. (D-9), Albio Sires (D-9), Donald Payne, Jr. (D-10), Mikie Sherrill (D-11) and Bonnie Watson Coleman (D-12). The Senate bill has 30 cosponsors including Sen. Bob Menendez (D-NJ).