House Votes to Allow Marijuana-related Banking
July 17th, 2014
Policy, Top News
The U.S. House of Representatives voted 236-186 in support of making it easier for cannabis-related businesses to work with commercial banks.
In February, the Treasury Department issued guidance instructing banks how to report on their dealing with cannabis-related companies without breaking federal money-laundering laws. Rep. John Fleming, R-La, sought to block the Treasury Department from implementing its guidance before being defeated in the latest vote by a wide margin – demonstrating that lawmakers are ready for change.
The Treasury Department and Justice Department rules issued in February are intended to “move from the shadows the historically covert financial operations of marijuana businesses” while helping cannabis-related businesses avoid keeping all of their assets in cash and product. In some cases, dispensaries and other businesses have become attractive criminal targets due to these troubling trends.
Bank wishing to do business with marijuana companies would have to verify they are properly licensed and gather information about the types of products that they sell as well as the nature of their customers. The banks must also be alert for any signs that the dealers are engaging in improper transactions, which would be filed in new “marijuana limited” reports that differ from the traditional variety.
Despite the earlier moves by the government, many commercial banks have been reluctant to lend to the cannabis industry, given that the production and sale of marijuana remains illegal on a federal level. Marijuana is classified as a Schedule I Controlled Substance with “no currently accepted medical use” and those caught dealing in the industry are subject to harsh federal penalties.
Many industry experts believe that it will take a change in federal law to attract widespread lending and banking to the sector, but the move by the House of Representatives this week is certainly a step in the right direction.
This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.
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