A U.S. government funding bill that would protect banks from repercussions if they accept money from the cannabis industry cleared a key House committee this week.
The House Appropriations Committee approved the fiscal year 2020 Financial Services and General Government bill by a vote of 30-21. It includes $24.55 billion in discretionary funding, an increase of $1.4 billion on the 2019 figure and $355.5 million more than President Donald Trump’s 2020 budget request.
It is a mammoth bill, with no fewer than 808 different sections, but the one that will be of the greatest interest to the cannabis industry is Section 633. It contains a new provision prohibiting funds made available in the Act from being used to penalize a financial institution for providing financial services to a legal and licensed marijuana company in the U.S.
That would essentially prevent the authorities from punishing any banks or credit unions that decide to serve the marijuana industry. It would only run for the 2020 fiscal year, but there is every chance it would be added in 2021 too if it is popular.
The bill still has to pass through the full House and the Senate and there are opportunities for amendments, so American cannabis producers will just have to await the results with bated breath.
At present, U.S. banks are banned from accepting any money that comes from criminal proceeds. Marijuana may be legal in 33 states for medical purposes and 10 for recreational purposes, but it is still illegal at a federal level and that means money from the cannabis industry constitutes criminal proceeds.
Attorney General William Barr finds the conflict between state and federal law “intolerable”, but the impasse remains. It has left legal cannabis producers and retailers unable to bank their money, so many of them have to deal in cash and this makes it harder for states to earn their fair share of tax.
The Secure and Fair Enforcement (SAFE) Banking Act offers a more permanent solution to the issue, as it would protect banks from being prosecuted by the federal government for servicing the cannabis industry on an ongoing basis, enshrined in law. It has passed a House panel, but it also needs to clear several more hurdles.