Senator Jeff Merkley (Dem-Oregon), Senator Patty Murray (Dem-Washington), Senator Michael Bennet (Dem-Colorado) and Senator Ron Wyden (Dem-Oregon) this week pressed federal financial regulators to issue clear guidance for financial institutions serving legal marijuana businesses, making it easier for those businesses to access banking services rather than operating on an all-cash basis.
According to the senators — all from states that have legalized marijuana use – many legal marijuana businesses are currently forced to operate on an all-cash basis, creating a public safety risk and making it more difficult for states to collect taxes.
In a letter sent this week to the six top federal financial regulators, the senators asked multiple agencies to work together to issue joint guidance to financial institutions from regulators across the federal government.
Currently, many legal marijuana businesses in Oregon, Washington, Colorado and other states that have legalized recreational or medicinal marijuana are forced to run their businesses using cash because banks won’t serve them, fearing reprisal from the federal government.
Without the ability to open a bank account or accept non-cash forms of payment, the businesses must pay taxes in cash and keep large amounts of cash on the premises. This presents a logistical challenge for state and local governments collecting taxes, and creates a significant public safety risk for the businesses and the surrounding communities by making legal marijuana businesses a prime target for robbers and other criminals, the senators argued.
In 2014, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued guidance on how financial institutions can serve legal marijuana businesses in states that have legalized recreational or medicinal marijuana, but without clearer guidance from all federal regulators to provide certainty in the regulatory environment, most banks and credit unions are still not serving marijuana-related clients. In some cases, even businesses that are only tangentially related to the marijuana industry – for instance, real estate companies that have leased space for dispensaries, or security firms working for a marijuana-related business – have had their bank accounts shut down.