Read my op-Ed on Marijuana Banking https://t.co/I1QLH9q4NC
— Rodney E. Hood (@Rodney_e_hood) October 8, 2021
At Marijuana Moment – Here’s the introduction
“Most experts agree the ultimate legalization of marijuana at the federal level is a foregone conclusion—at this point it’s a matter of when, not if. Taking action to clarify banking rules for the legal cannabis industry now, rather than standing by while states construct an ad hoc system of conflicting banking rules, will go a long way toward easing that transition.”
By Rodney E. Hood, National Credit Union Administration
The evolution of a legal marijuana industry over the last decade is among the most striking social and cultural changes in recent memory. After decades of prohibition, today 36 states have legalized marijuana use for medical purposes, with 18 states permitting recreational use for adults. BDSA, a leading industry research firm, reports that in 2020 legal cannabis sales in the United States topped $17.5 billion, a 46 percent increase over the previous year.
Yet at the same time, many marijuana-related businesses (MRB) and their employees lack access to financial services, owing to the fact that the federal government has not acted to update banking laws to accommodate this burgeoning industry. As a result, many MRBs are unable to secure commercial loans on reasonable terms or access electronic payment systems, which forces them to conduct transactions on a cash basis. This untenable situation is creating confusion and uncertainty while stymieing the industry’s growth.
Many people are surprised to learn that credit union and bank financial services providers can do business with the marijuana industry, so long as they observe anti-money laundering laws under the Bank Secrecy Act, practice due diligence and meet other basic requirements. Furthermore, the Treasury Department’s Financial Crimes Enforcement Network (FINCEN) published guidance on marijuana businesses to help guide financial institutions that seek to conduct business with state licensed MRBs.
Read full op-ed