The House of Representatives voted on July 16 for banks to provide traditional banking support to legal marijuana businesses, indicating a progression toward national acceptance of the drug’s legalization.
With marijuana still being illegal under federal law, many banking institutions have a history of being fearful to loan out money to marijuana-related businesses, forcing them to conduct cash-only transactions, which puts them at risk of having tax and employee payroll issues.
“While we appreciate the efforts by the Department of Justice and FinCEN, guidance or regulation doesn’t alter the underlying challenge for banks,” Frank Keating, the president and CEO of the American Bankers Association tells the HuffingtonPost. “As it stands, possession or distribution of marijuana violates federal law, and banks that provide support for those activities face the risk of prosecution and assorted sanctions.”
The House’s latest passed amendment will prevent the Treasury Department from spending funds to penalize financial institutions that provide services to state-legal marijuana businesses.
With reports showing that the legal marijuana business is expected to be a $2.3 billion industry in 2014, I’m sure that this latest regulation is music to the ears of many business owners.