Congress can solve the cannabis banking conundrum now
With the number of states legalizing cannabis in some form continuing to grow, it’s understandable that Americans with differing views would want to debate whether it’s time to reform the nation’s marijuana laws. As representatives of the credit union and banking industries, we aren’t focused on the legalization debate. Instead, we are trying to solve a pressing practical concern caused by the ongoing conflict between state and federal cannabis laws — what to do with the money.
Right now, in the 33 states, territories and the District of Columbia where cannabis has been legalized, credit unions and banks are prevented from providing financial services to cannabis-related businesses because cannabis is illegal under federal law and, as a result, handling proceeds from a transaction involving it is considered money laundering. Not only does this leave cannabis businesses operating almost entirely in cash, but it has the added effect of criminalizing the vendors, suppliers and utility companies that serve those businesses.
For the cannabis business owner, this results in a lot of cash being stored in backroom safes, transported in backpacks and used for payroll every Friday. The presence of so much cash paints a large target on their storefronts and employees for would-be thieves. In fact, a 2015 study conducted by Wharton found one in every two cannabis dispensaries were robbed or burglarized — with the average thief walking away with anywhere from $20,000 to $50,000.
