An important issue for the future of marijuana businesses won crucial support this week on Capitol Hill. Several U.S. senators expressed support for giving banking access to the billion-dollar marijuana industry, which deals almost exclusively in cash.
Marijuana is legal in 33 states but still illegal under federal law, so any bank that handles marijuana money can be charged with money laundering. That threat makes it difficult for most growers and sellers to get a bank account for their business.
The comments at this week’s hearing before the Senate Banking, Housing and Urban Affairs Committee were largely focused on the SAFE Banking Act, which would prevent federal banking regulators from punishing banks for working with legal cannabis businesses.
“I think the case has been made pretty strongly to get cannabis banking issues resolved,” said Committee Chair Mike Crapo, an Idaho Republican who had previously stated that he wouldn’t address this problem as long as the federal government still regarded marijuana as a controlled substance. “This is an important and complex issue we need to get right.”
Some advocated for the bill even though they have less-than-enthusiastic feelings about the drug. “If this is an issue Congress could do anything about, we should do it,” said Sen. Jon Tester, a Montana Democrat. “Not that I’m any big supporter of it — because I’m not. But we are representatives of the people.”
What the Hearing Covered
Testimony at Tuesday’s hearing touched on the problems that being a mostly cash-based industry creates.
In general, dealing in large amounts of cash makes marijuana businesses targets for violent crime and makes it difficult for states to track and collect the tax revenue they’re owed.
The city of Sacramento, Calif., for example, estimates that cannabis dispensaries are underpaying their taxes by hundreds of thousands of dollars a