Bipartisan Senators Look to Address Banking Risk for Marijuana Industry
The eight senators, who spanned the political spectrum from libertarian-leaning Republican Rand Paul to liberal Democrat Cory Booker, introduced the bill to block federal banking regulators from somehow pushing a financial institution to stop serving a state-sanctioned marijuana business or the businesses’ landlords or lawyers.
The government would also not be allowed to give banks incentives to cut off the businesses.
While marijuana is legal for medicinal or recreational use in 44 states, the federal government still considers it an illegal and highly dangerous drug.
Under former President Barack Obama, a Democrat, regulators gave banks guidance on working with cannabis-related businesses and staying within the law. But the guidance intimidated most financial institutions and they cut ties with the sector, saying compliance with extensive requirements was too expensive and did not assure them they would not be prosecuted in the future.
The current situation leads dispensaries to either deal all in cash or hide their business’ true nature from banks, creating public safety and legal risks, lawmakers say.
The unlikely collection of senators sponsoring Wednesday’s bill have attempted to get similar legislation approved before, and gained wider support with each try. That could help the legislation pass the closely divided Senate.
Since President Donald Trump took office in January, marijuana advocates have staged demonstrations in Washington, including distributing hundreds of free joints on inauguration day.
But last week, Attorney General Jeff Sessions, who has long opposed easing pot restrictions, ordered the Justice Department to toughen prosecutions of all magnitudes of drug crimes. He has also made drugs a top issue for his crime-reduction task force.
Proponents of legalizing pot, meanwhile, were worried by a statement Trump released when he signed a massive spending bill at the beginning of the month.
In part, Trump used the statement to signal that he would like to go after states’ medical marijuana laws. The spending bill bars Justice from using any funds to block states from implementing those laws, a prohibition that Trump said goes against his constitutional responsibility to faithfully execute federal laws.
[In 2015, Lloyd’s of London stopped insuring marijuana industry firms of any kind due to conflicts between federal and state laws over their legality.]
(Reporting by Lisa Lambert; Editing by Tom Brown)
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