As Maryland develops it medical marijuana licensing program, one problem persists. Businesses that sell marijuana complain that they have no place to secure their money.
A recent Senate committee vote took a step toward addressing those concerns.
In a 16-14 vote, largely across party lines, the Senate Appropriations Committee approved an amendment that prohibits money from being used to prevent or penalize financial institutions that provide services to a manufacturer, producer or person in the marijuana business in states where it’s legal. The amendment is part of the 2017 fiscal year Financial Services and General Government Appropriations Act now headed to the Senate floor.
The amendment was proposed by Sen. Jeff Merkley, D-Oregon, and Sen. Patty Murray, D-Washington. Maryland Sen. Barbara Mikulski, a Democrat and a member of the committee, voted in favor of it.
Under current federal regulations, marijuana is classified as a Schedule I Controlled Substance. Federally chartered banks have federal deposit insurance and are subject to federal law. If a bank violates federal law it can lose its charter.
Banks are also subject to a range of federal laws including the Controlled Substances Act, USA Patriot Act and the Bank Secrecy Act, which is why bankers and state governments are waiting for clarity from the federal government.
Marijuana.com, a blog that follows cannabis legislation across the country, reported last week that the financial services industry is often skeptical of policy riders on appropriations bills. The industry prefers standalone bills, such as the ones introduced last year, to offer more certainty.
The federal government’s guidance thus far has come in the form of a memo from the Department of Justice. Some banks and credit unions in other states have followed the memo to offer depository services. However, it doesn’t address the drug classification issue and is a non-binding document that can easily be changed with a new administration.
The memo outlines eight marijuana enforcement priorities, including two that banks have said are difficult to monitor. Those priorities include preventing the distribution of marijuana to minors and preventing the diversion of marijuana from states where it is legal to states where it is not.
Last year, lawmakers introduced the Marijuana Access to Banking Act of 2015. Both the House and Senate versions stayed in committee.
The Maryland Bankers Association has spoken about the need to update laws at the federal level to allow pot businesses, now considered legitimate in 23 states, to get access to financial services.
“We believe that because these businesses will be operating in Maryland, they should have access to financial services,” Kathleen Murphy, president & CEO of the Maryland Bankers Association, told The Daily Record in March.
“As more states act, there will be more pressure in Congress to redefine marijuana as how it relates to the Controlled Substances Act,” said Murphy.
Maryland’s medical marijuana law does not require cannabis businesses to have a bank. However, license holders must allow their financial institutions to disclose certain information to regulators.
“The Maryland law is a superior example of a law with very clear, detailed regulations around the sale and implementation of medicinal marijuana,” said Murphy. “Nationally, Maryland’s law is viewed as a great example of a clear and strong regulation.”