Efforts to address the marijuana industry’s banking woes were dealt a second blow this month by a top Congressional committee.
The Senate Appropriations committee voted 21-10 to sideline an amendment that would have offered protections for financial institutions that open bank accounts for legal cannabis firms. The move follows the recent defeat of a parallel amendment in the House last week.
Under current policies, banks that serve marijuana businesses – both recreational and medical – must follow a complicated patchwork of federal guidance, memos and costly compliance rules. Otherwise, they risk losing their charter.
That’s left many banks sitting on the sidelines and countless cannabis firms locking away millions of dollars in backroom vaults.
“The real losers from this action are our communities, who will remain less safe because of the cash that remains on the streets instead of in the bank,” said Kenneth Berke, co-founder of California-based PayQwick, which offers payment and banking solutions for cannabis companies.
“With so much of the country in favor of legal cannabis, it’s mind-boggling that our elected representatives remain unwilling to pass desperately needed legislation.”
The lack of banking options is leading a growing number of states to pursue their own solutions – including privately funded banking options and state-owned banks that would exclusively serve the industry.
But those proposals, and the recent legislative defeats, have few industry insiders hopeful that a solution is on the horizon any time soon.
“From a practical standpoint, this continues to surprise me, but from a political standpoint, it’s not surprising at all, ” said David Dinenberg, founder and CEO of Kind Financial, a cannabis compliance technology company based in Los Angeles.
“As long as we have Republican control, there will be no federal changes made.”
Lisa Bernard-Kuhn can be reached at [email protected]