Two state treasurers have sent President Trump letters requesting that his administration offer guidance on banking regulations regarding medical marijuana.
State treasurers from both Illinois and California have recently sent letters to President Donald Trump requesting guidance to the banking industry about marijuana.
With marijuana federally classified as a Schedule I substance, banks and financial institutions have been hesitant to serve cannabis-related businesses, even in states where legalization measures are in place, for fear of being reprimanded. Federal law prohibits banks from processing money used in the legal marijuana industry. Without banking service, businesses within the marijuana industry have in general had to operate cash only, although a recent report did find that the nation’s top four banks have serviced cannabis businesses.
California State Treasurer John Chiang sent his letter to Trump, as well as members of California’s congressional delegation, in December, just weeks after voters approved a measure to legalize recreational marijuana. The state legalized medical marijuana in 1996.
“This conflict between federal and state rules creates a number of problems for the states that have legalized cannabis use, including difficulties collecting tax revenue, increased risk of serious crime, and the inability of a newly legal industry under state law to effectively engage in banking and commerce,” Chiang’s letter to Trump read.
Treasurer Michael Frerichs of Illinois, a state with now a burgeoning medical marijuana program, sent his letter to Trump just a week ago. In a news release, Frerichs said the administration’s cannabis policy “will be crucial to the continuing availability of medical marijuana in Illinois.”
“Medical marijuana is not right for everyone. However, its positive results for those with debilitating conditions, including Veterans and children threatened by seizures, are undeniable,” Frerichs said. “Updating our banking laws to embrace commonsense change will allow Illinois to properly manage this reasonable program, guarantee uninterrupted access to medical users, and protect financial institutions that serve the industry.”
Frerichs added clarification and assurance is now particularly important, as there’s concern among those operating within the legal cannabis market that Trump’s nominee for attorney general could pose a threat to the industry. Senator Jeff Sessions, who today won Senate Committee approval and is one step close to being confirmed, has referred to marijuana as “dangerous” and had previously criticized President Barack Obama for being too lax on marijuana.
During Obama’s administration, the Justice Department promised to not go after cannabis businesses operating legally under state laws, however last year Congress refused an amendment that would protect cannabis-friendly banks. Trump’s assurance to banks and financial institutions that they would not face penalties or prosecution for servicing cannabis businesses could go a long way in convincing more to provide accounts and loans.
Massachusetts Senator Elizabeth Warren, along with nine other members of Congress, recently launched an effort to support banks that provide services to cannabis-related business in states where marijuana is legal. Twenty-eight U.S. states have so far passed medical marijuana laws and eight states have legalized recreational marijuana.
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