House Approves Banking Access to Legal Cannabis Industry
The U.S. House of Representatives voted 231-192 in favor of an amendment to the financial services bill on Wednesday. The new law will block the Treasury Department from penalizing banks and financial institutions from providing services to the legal cannabis industry. Representatives Denny Hicks, Dana Rohrabacher, Ed Perlmutter and Barbara Lee sponsored the bipartisan bill.
Since the legalization of recreational cannabis last year in Colorado and Washington, the industry has been forced to be cash-only. The federal government classifies cannabis as a Schedule I narcotic and while some states have approved medical and recreational legalization, the feds have not. This has created a predicament for the states with legal cannabis industries because banks are regulated on the federal level. Because the government has deemed banking with these newly formed dispensaries unacceptable, the Treasury Department has the ability to use federal funds to penalize banks that try to work with cannabis businesses.
Being a cash-only industry has been difficult. From the very real fear of robbery to difficulties with tax preparation, the restrictions on how to handle income has been only negative. With the access to banking, customers will be able to use credit cards, write checks and not have to bring in large amounts of cash for each purchase. Companies would also be able to pay their employees online or through checks as other businesses do.
Dispensaries are currently a large target for thieves, a fact which is dangerous for businesses, consumers and the general public. With the rise in the number of dispensaries and the inability to use armored vehicles to transport their money to banks, there is a reasonable chance that crime rate will rise when more people realize the accessibility of cannabis-related funds.
Cash-only also slows the processes within the businesses from payments to managing the books and gives cause for fear of tax evasion and money laundering.
The bill must now be voted on in the Senate before can go into effect. While there was bipartisan support in the House and an ongoing shift in views on the industry, the Senate is still slow in keeping up with the demands of the new businesses and may lag on any real action.
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