A North Carolina bank last week announced the launch of a new program to provide banking and other
“As one of the first banks to roll out a hemp banking program after the 2018 Farm Bill, we witnessed first-hand the role dedicated banking programs played in advancing the entire industry,”
Under current federal regulations, banks are subject to penalties under money laundering and other laws for servicing state-legal marijuana businesses, leaving the cannabis industry to operate in a risky environment heavy in cash. Democratic Rep. Ed Perlmutter of Colorado has tried to rectify the problem with the
Broad Support for Cannabis Banking
In November, a bipartisan group of 24 state governors sent a letter to congressional leaders calling for the passage of the SAFE Banking Act. In their message, the governors noted that 37 states, four U.S. territories and the District of Columbia have passed measures that legalize some form of cannabis use.
“Medical and recreational cannabis sales in the U.S. were estimated to total $17.5 billion last year, but because of antiquated federal banking regulations, almost all cannabis transactions are cash-based,”
One of the governors who signed the letter, Gov. Gretchen Whitmer of Michigan, noted that the voters of her state have clearly communicated their desire for cannabis policy reform.
“Since 2018, our state has worked with industry businesses to pass laws to make cannabis safe and accessible. However, operating all-cash businesses poses an inherent danger for businesses in our state, and the SAFE Banking Act provides clear guidelines for our financial institutions to bank with these businesses,”
Without action on the issue at the federal level, some states have proposed legislation to permit banking services for cannabis businesses, including a successful 2020 bill in California. Already in 2022, lawmakers in Pennsylvania and New York have considered measures to ease restrictions on banking services for cannabis businesses.
Mel Barnes, the director of the hemp and cannabis banking program at West Town Bank & Trust, said that the bank’s existing infrastructure and successful track record in the hemp space will raise the standard for cannabis financial services.
“Legal cannabis businesses should be able to access the same financial services as other industries,” said Barnes.