Oregon’s New Marijuana Banking Bill Provides No Federal Protection

Banking services may soon be made slightly easier for those involved in the Oregon cannabis industry. The State Legislature has pushed through a bill that will make the state the first in the nation to eliminate some of the criminal liability for those banks wanting to work with marijuana businesses.

On Friday, the Oregon Senate put their seal of approval on a piece of legislation (House Bill 4094) intended to give banks the freedom to do business with members of the cannabis trade without concerns of legal repercussion. The House of Representatives also approved the measure, sending it to the desk of Governor Kate Brown for a signature.

At its core, this emergency bill, which was introduced by Representative Tobias Read, “Exempts financial institutions that provide financial services to marijuana related businesses, researchers and laboratories from any criminal law of this state that has element that may be proven by substantiating that person provides financial services to person who lawfully possesses, delivers or manufactures marijuana or marijuana derived products.” It also gives the Oregon Liquor Control Commission and the Oregon Health Authority the right to share information about marijuana license holders with financial institutions.

The bad news is while this legislation would create additional protections at the state level, it does nothing to stop the federal government from marching in and slapping banks with money laundering charges. Although the Justice Department issued some guidance in 2014 for the banking industry to work with marijuana businesses, there are no concrete laws on the book to prevent the U.S. Drug Enforcement Administration from swooping in to shut down any bank that accepts deposits from any organization that deals in weed. This has prevented many larger financial institutions from so much as considering allowing pot entrepreneurs to open accounts, forcing most dispensaries to operate on a cash-only basis.

However, if Governor Brown signs the bill into law, which she is expected to do, the cannabis industry would likely reap the benefits of smaller banks and credit unions stepping up to offer banking solutions. All any of these organizations would need to do is adhere to the key points of the Justice Department’s guidance, as outlined in the Cole Memo, and they should be able to keep the Feds from stepping in to harass them. But don’t expect any of the major banking institutions to embrace the cannabis trade – that isn’t about to happen until the marijuana laws have been changed at the federal level.

But even this kind of marijuana reform is not likely to happen anytime soon. A couple of proposals aimed at establishing solid policies pertaining to marijuana banking were introduced in both chambers of Congress last year. The goal was to provide a “safe harbor for depository institutions providing financial services to a marijuana-related legitimate business,” granting these organizations “immunity from federal criminal prosecution or investigation.” Neither the House nor the Senate measure has received any action since their introduction. The issue was also addressed in 2015 in the form of a proposed amendment to the federal budget. It, too, failed to gain any traction.

What do you think? Could this banking legislation offer some relief for Oregon’s marijuana marketplace? Let us know.