Regulation

Senate: Marijuana Businesses Still Can’t Use Banks

A U.S. Senate panel has voted to block an amendment that would allow banks to open accounts for marijuana businesses without being punished by federal regulators. According to Forbes, the Senate Committee on Appropriations voted 21 to 10 to table the amendment.

The current policy forces many marijuana businesses to operate on an all-cash basis, which is “a big problem because it’s great for organized crime, it’s great for money laundering, it’s great for theft and larceny, it’s great for cheating on taxes, it’s great for cheating on your payroll,” said Senator Jeff Merkley (D-OR), the sponsor of the amendment, before the vote. “We’re really facilitating crime by not enabling the banking industry to provide basic services.”

Several Democratic members of the Senate panel, who said they supported the ability of marijuana businesses to access financial services, objected to the measure due to procedural issues.

“I’ve supported it in the past and I think it’s different today,” said Senator Jon Tester (D-MT). “It adds a level of confusion to the folks who are out there doing business.” He added that it would give a “false hope” to businesses because it only covers the Department of the Treasury and not the Justice Department.

“Do I think these businesses ought to be able to bank?” he said. “Absolutely.”

Of course, legalization supporters were not happy with the vote.

Don Murphy of the Marijuana Policy Project said, “Today was a victory for the drug cartels and anyone else who benefits from billions of dollars of unaccountable, untraceable and unbankable cash.”

Despite the setback, new Treasury Department data shows that a growing number of financial institutions have been opening accounts for marijuana growers, processors, retailers and related outfits. Attorney General Jeff Sessions’ strict stance on marijuana companies has been facing pushback from the nation’s banks, which are increasing their lobbying efforts to get more lenient plans. In fact, with support from both President Donald Trump and Democrat Senator Elizabeth Warren, the leading banking industry associations are urging lawmakers to make it easier for banks to serve pot companies in states where cannabis is legal, including California and Colorado.

The report noted that Federal Reserve Chairman Jerome Powell supports the initiative, saying at a press conference last week that, while it’s a “difficult situation,” it would be “great if that could be clarified.”

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