Elizabeth Warren Promotes Banking Rights for Marijuana Industry

Democratic firebrand Senator Elizabeth Warren is known for championing the working class, but now she’s firing up something a little closer to home. Warren is pushing to create a framework that would allow marijuana-based businesses to access the banking system.

If the question of whether your friendly neighborhood cannabis cooperative can access the bank doesn’t seem pressing to you, consider this: In 2016, the industry pushed $7 billion in sales– and much of that money was processed in cash transactions.

Only around 300 banks offer services to marijuana-based businesses because they occupy a strange regulatory limbo that makes them risky customers. Warren and some of her cohorts want to change that.

While “marijuana-based business” may trigger a mental image of a dispensary or head shop, the industry is much, much larger than that. It includes growers and facilities that produce a variety of marijuana products like tinctures, extracts and edibles, along with the companies that supply equipment to those operations.

It also includes the chemists and labs who conduct safety and quality testing to confirm that marijuana products contain what they say they do — and don’t have any nasty hidden surprises, like pesticides or mold.

Companies that manufacture pipes and other equipment fall under this category as well, as do transportation companies, security firms, distributors and a host of other businesses that are connected with the industry.

As a growing number of states legalize recreational and/or medical cannabis, the question of how companies can actually conduct business when federal law still strictly outlaws cannabis becomes complicated.

Many states and individual municipalities have very specific regulations that govern how these companies do business — to open a flower shop, you might need to apply for a business license and get approval from the planning commission for your sign, but if you want to sell cannabis products, you probably need a background check, approval from the police department and a number of other qualifications to open up shop.

And once you do, you have a big problem: You need to pay vendors, people need to pay you and you need a way to keep all that money safe.

The banking industry can be quite risk-averse, and handling money associated with illegal actions carries big risks. They’re subject to specialized reporting requirements, not to mention the fact that the government could audit their operations, and they could be forced to cooperate in asset seizures.

Many banks don’t want the headache of accepting cash and check deposits from marijuana-based businesses, or processing credit card transactions. It’s easier to just turn them away, even though the Department of the Treasury has established a set of regulations for banks that want to do business with a lucrative and growing industry.

Warren and her cohort want to change that.

This isn’t just about allowing dope dealers to open bank accounts like everyone else. There are a lot of clear advantages for everyone when it comes to allowing marijuana-based businesses to access the banking system.

For example, it’s a net gain for public safety when businesses aren’t storing large amounts of cash on site. In addition, it’s easier to track financial activity, which means it’s easier to enforce tax laws — the IRS wants you to pay taxes whether or not the source of your income is legal on the local, state or federal level.

Creating a clear banking framework also, Warren argues, reduces the risk that money will end up being funneled into “criminal enterprises.” After all, why enter risky criminal partnerships and transactions — or try to launder money — when you can just stick it in the bank? Having more money on deposit also allows banks to offer more favorable loans, too, which can help economically revitalize communities.

Warren and her colleagues, including Senator Bernie Sanders, have requested that the Federal Crimes Enforcement Network reevaluate the way it approaches the question of marijuana-based businesses and banking. The hope is to provide clarity, assurances and a clearer path to going “legit” for those companies that want to do so.

There’s a big caveat and unknown, though: A changing presidential administration means that government appointments and policy priorities will shift, unless Congress decriminalizes or legalizes marijuana.

What’s the difference? Decriminalization means that marijuana-related activities won’t be treated as crimes, while legalization adds a regulatory aspect.

There’s a possibility that the Trump Administration may not be so friendly to the marijuana industry. Consequently, regulatory reforms to bring the industry into the light may take a backseat to the enforcement of federal law, though the war on drugs is a losing proposition.

Photo credit: AFGE

73 comments

Marie W
Marie W2 years ago

Thanks for posting.

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Nang Hai C
Nang Hai C2 years ago

Thank you.

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Chen B
Chen Boon Fook2 years ago

Thank you

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Siyus C
Siyus Copetallus2 years ago

Thank you for sharing.

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Brian F
Brian F2 years ago

Obama or Hillary never agreed to legalize marijuana,which clearly shows they were siding with Wall Street, and big businesses which profit off the criminalization of marijuana and hemp, which never killed anyone, unlike alcohol and tobacco, which kills 150,000 people each year. Bernie Sanders was honest and supported marijuana and hemp legalization, but the oligarchy could never let him win, because it would undermine the profits they make by criminalizing a harmless weed. This shows how corrupt Obama's and Hillary's neo liberal corporate democratic policies, that aren't much better than the republicans, were. Legalizing Marijuana and hemp create jobs, and help our economy.

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Eric Lees
Eric Lees2 years ago

@Vivianne Mosca-Clark
"Elizabeth Warren is a good person. Bernie Sanders and her are people we can trust. They both have been on the side of the main street issues.
As far as the banks go and the marijuana money is concerned, I am surprised that banks are not grabbing at it too. They grab everything else they can."

Not true, both Sanders and Warren are silent on the FED, that puts them against the people and on the side of the Oligarchy when it comes to money. Plus both endorsed Clinton, the war goddess of the Oligarchy and Crony Capitalism. So they are either fools or hypocrites either way they are not on the side of we the people.
It's not the banks that are blocking them from banking, it's the government. Of course banks would be happy to do business with any company that has cash flow.

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heather g
heather g2 years ago

I'm reminded about "advertising in 1940's" email picures I've seen when the USA was actively pushing marijuana and heavier drugs for migraine, sore throats, stomach aches, etc.

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Debbi -
Debbi -2 years ago

Banks take anyone's money. It's hard to believe they haven't honed in on the marijuana businesses. They'll grab anyone's money. They aren't choosy.

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william M
william Miller2 years ago

thanks

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Lisa M
Lisa M2 years ago

Noted.

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