On Friday, the administration of Pennsylvania Gov. Tom Wolf (D) wrote a letter to top leaders in Congress calling for protections for banks that deal with the legal cannabis industry, the Philadelphia Enquirer reports.
Millions of dollars in cash flow across Pennsylvania — and other legal states — on a monthly basis, all nearly impossible to complete insure and extremely vulnerable to theft and other risks.
The letter, sent by Pennsylvania Secretary of Banking and Securities Robin L. Wiessmann, was signed by state banking officials from Alaska, Connecticut, Hawaii, Louisiana, Michigan, Montana, Nevada, New York, Oklahoma, and Washington state.
“We urge Congress to consider legislation that creates a safe harbor for financial institutions to serve a state-compliant business, or entrusts sovereign states with the full oversight and jurisdiction of marijuana-related activity. … The well-documented conflict between federal and state law creates barriers for banks desiring to serve businesses involved in state-licensed marijuana activities. This has resulted in regulatory and legal risk … and created a ‘cash and carry’ industry. … This raises concerns with respect to public safety, increases difficulty tracking the flow of funds, and contributes to a loss of economic activity, workforce development and community development opportunities.” — Letter from Robin L. Wiessmann, PA Secretary of Banking and Securities
Previously, the Obama-era Cole Memo had provided some protections for financial institutions dealing with the cannabis industry; however, Attorney General Jeff Sessions rescinded the memo earlier this year.
“The cash-only business creates horrific safety and operation concerns for both marijuana-related businesses and their employees, vendors, landlords and taxing bodies.” — Steve Schain, Philadelphia cannabis banking attorney, via the Philadelphia Enquirer
Nearly 70 percent of all cannabis businesses in the U.S. that have direct contact with plants do not have a bank account. Even 50 percent of cannabis businesses that don’t deal directly with the federally illegal cannabis plant are also unbanked. Insurers generally only cover up to $20,000 in “cash loss,” an amount that is easily exceeded by even small cannabis businesses; many businesses will have $200,000 to $500,000 in cash on hand.
The Wolf Administration now awaits a reply from the addressees of the letter: U.S. Reps. Paul Ryan (R-WI) and Nancy Pelosi (D-CA) and U.S. Sens. Mitch McConnell (R-KY) and Chuck Schumer (D-NY).