Banking and Finance Law Daily State treasurers seek cannabis banking changes as part of next COVID package
Friday, July 10, 2020

State treasurers seek cannabis banking changes as part of next COVID package

By Jacob Bielanski

A letter to Congress from 15 state treasurers argued that unresolved conflicts between state and federal law has led marijuana-based businesses to rely more on cash-based transactions during the pandemic, placing over 4 million medical users at greater risk of contracting coronavirus.

A bipartisan group of 15 state treasurers have urged leaders in Congress to pass legislation that would give marijuana dispensaries access to the larger financial system. Letter authors specifically asked Congress to include text of the Secure and Fair Enforcement Banking (SAFE) Act as part of the next round of COVID-19 relief legislation. A version of the standalone bill was already passed in the House of Representatives last September.

"Allowing the industry access to traditional financial systems will make the industry safer, and give banks and credit unions a much needed cash infusion, providing more capital for banks and credit unions to lend to other businesses and individuals in need," the letter said.

The SAFE Act attempts to resolve conflicts between state and federal law regarding cannabis or marijuana sales that has resulted in issues such as a lack of access to federal emergency relief funds. The treasurers further worry that federal regulations preclude many marijuana businesses from switching to cashless transactions during the pandemic, a result of federal law limiting these businesses' access to the traditional banking system. These cash-based transactions were "particularly dangerous" for over 4 million patients with medical cannabis prescriptions.

"In response to the coronavirus, the international financial community, many major businesses, and even governmental entities have looked for cashless alternatives to financial transactions," the letter said. "However, the overwhelming majority of medical cannabis transactions still involve cash."

Signatories to the letter include Oregon, California, and Colorado, whose laws have legalized marijuana for adult recreational use, as well as a number of states where marijuana is either legalized for medical use only or decriminalized.

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