Federal and state law differences on cannabis policy leaves banks and real estate providers trapped between their mission to serve lawful businesses in local communities – and the threat of federal enforcement action.
In March 2019, the House Financial Services Committee passed the bipartisan SAFE banking act (H.R. 1595). It would eliminate the need for legal cannabis-related businesses to operate on a cash basis, bring them into the banking system, and allow them to obtain accounts and credit cards. Commercial property owners would get a safe harbor if they lease space to a Cannibus Related Business, and their mortgages cannot be subject to corrective action by a bank. For fuller real estate business protections, Congress should pass other legislation to clarify that state-compliant marijuana transactions are not illegal federal “trafficking” and do not result in unlawful proceeds under money laundering statutes.
Currently 47 states and DC legalize marijuana to varying degrees. Yet use, possession, and sale remains illegal under federal law. Real estate owners, lessors, brokers, and financiers need certainty when they transact with legitimate cannabis-related businesses.
Without a bank account, dispensaries and other legal CRBs must operate on a cash basis. Risks of crime thus increase and tax revenues to pay for infrastructure and other government services are potentially lost.
H.R. 1595 can significantly address these problems by providing protections for banks, real estate firms and their employees from punishment simply because they aim to serve businesses within the 47 states that have legalized marijuana to varying degrees.
In the Senate, legislative proposals addressing these issues include: S. 1200, the broadly bipartisan Secure and Fair Enforcement (“SAFE”) Banking Act, is led Senators Gardner (R-CO) and Merkley (D-OR). S. 1028, the bipartisan Strengthening the Tenth Amendment through Entrusting States (“STATES) Act, is led by co-sponsors Senators Gardner (R-CO) and Warren (D-MA).
September 27, 2019
House Passes Legislation to Permit Banking Services for Legal Cannabis-Related Businesses
July 26, 2019
Senate Committee Considers Protections for Banks Dealing With Legal Cannabis-Related Businesses; New Bill Would Allow CRBs to Buy Property Insurance
May 3, 2019
Roundtable Urges Senate Committees to Address Federal-State Cannabis Policy Conflicts Constraining Banking, Real Estate Transactions
Senior Vice President & Counsel