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Senators Call for Cannabis Banking Reform

December 15, 2016
Calculator; pen and filled cheque on wooden table
A bipartisan group of Senators sent a letter to the head of the Financial Crimes Enforcement Network (FinCEN), encouraging federal regulators to take action to give state-legal cannabis businesses access to banking services.

Banking has long been a thorn in the side of cannabis business owners. Because cannabis remains a federally illegal Schedule I drug, most national banks won’t allow state-licensed cannabis businesses to open account. Some smaller state-chartered banks and credit unions are quietly banking cannabis businesses, but the oversight and reporting required by FinCEN make it nearly cost-prohibitive.


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As a result, cannabis businesses are forced to deal almost entirely in cash. That leaves businesses vulnerable to thefts and break-ins. This isn’t just a serious concern for the businesses and their employees. It also poses a serious danger to customers and jeopardizes the safety of the community.

The lawmakers were led by Oregon Senator Jeff Merkley. His letter included signatures from a number of prominent politicians from both sides of the aisle. Sen. Elizabeth Warren, who had her hand forced on the issue by the recent legalization in Massachusetts, signed on to the letter. So did two other lawmakers from recently legalized states, Sen. Angus Kaine (D-ME), and Sen. Lisa Murkowski (R-AK).


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The letter was prompted by the recent general election, during which eight states legalized cannabis for medicinal or adult use. More than half of the states have legalized cannabis for medicinal use, including eight states (along with the District of Columbia) that legalized for adult use.

The letter makes a compelling argument for the federal institution to allow banking services to be available to state legal cannabis businesses, not just for safety, but for the benefit of the federal government:

“Forcing all these direct and indirect businesses to operate in cash not only creates a huge target for criminals, but also complicates the collection of state and federal taxes. The fledgling legal market for marijuana is around $7 billion, a figure that’s dwarfed by the overall billion US market, most of which remains illegal. This business environment is an invitation to tax fraud, robberies, money laundering, and organized crime.”


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The letter ends with an urgent call for FinCEN to issue clear guidance on the complex situation. The letter was signed by 10 Senators, including Al Franken (D-MN), Cory Booker (D-NJ), Patty Murray (D-WA), Ron Wyden (D-OR), Kirsten Gillibrand (D-NY), and Bernie Sanders (D-VT).

This isn’t the first time lawmakers have called for action on the banking issue. In 2014, Sen. Dianne Feinstein (D-CA) and Sen. Chuck Grassley (R-IA) joined forces to call on FinCEN to issue clear guidance.

FinCEN has only ever made one statement on marijuana-related businesses, immediately after the legal market began operating in Colorado. That guidance included advice that placed a great deal of risk on financial institutions, leaving them open to civil and/or criminal liability. Feinstein’s letter characterized the guidance as “dangerously misleading.”

The Financial Crimes Enforcement Network has yet to release any financial guidance on cannabis-related businesses since February of 2014.

Lisa Rough's Bio Image

Lisa Rough

Lisa is a former associate editor at Leafly, where she specialized in legislative cannabis policy and industry topics.

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  • justsomeguy05

    This is an area where Presidential leadership was needed – and was a dismal failure. Certainly expect nothing better from the incoming administration and congress.

  • Bankers are salivating with thoughts of serving the cannabis industry. Credit card and debit card processors are slobbering over the possibility of earning several pennies every time a cannabis product is purchased. The Fed and state governments are frothing over the $$ cannabis taxes will deliver to their coffers. On the other hand, private prison corporations, alcohol and tobacco corps, some police unions… dread the day when cannabis banking becomes a reality. For the majority of these “players,” it’s simply about the money! Cannabis banking is inevitable; in fact, to a degree, it’s already here! Plenty of companies like MJSolutionsGroup and others are serving the cannabis industry today.

    Gun dealers, MLM, payday loan lenders, tobacco retailers, ammunition industry… face the same bank challenge thanks to President Obama’s “Operation Choke Point.” The future is OURS! Banking is a certainty. The FED’s and the regulators want cash to go away and take their pound of flesh $$. Jer – Trihouse