Up until recently, individual states have been free to apply their own set of rules of cannabis, whether it is medicinal or recreation. These decisions were up to the state without too much federal interference. This freedom within each state meant that in some areas marijuana businesses could hold bank accounts with no interference or legal issues from FED and/or Justice Department regulators. However, Jeff Sessions, the current administration’s U.S attorney, has said that discussions are in place to revise this policy.
This began April 2017, when Sessions directed a task force to implement revisions to the banking guidelines and the protection these guidelines gave to marijuana businesses. However, authority to change the state laws was not granted and by November 2017 Sessions was reporting to the members of Congress that the guidelines were still instated. Sessions was met with a large push back from house members.
Cannabis businesses have to use official financial institution to house profits made in order to be in compliance with state law, and the federal government is reviewing the guidelines on how banks and marijuana businesses may interact.
Drew Maloney, assistant secretary for legislative affairs from the U.S Treasury Department, penned the following to Congress members on Wednesday, 31st January: “We are reviewing the [banking] guidance in light of the Attorney General’s announcement and are consulting with law enforcement.”
Even though the Justice Department released this statement the U.S Treasury has confirmed on twitter that state-regulated, legit marijuana businesses may continue receiving services from financial institutions.
The fuss is surrounding a document released in 2014. If the state follows the procedure and guidelines within this document, the state is then free (for the most part) to make and implement its own laws surrounding cannabis in relation to financial institutions, youth, driving under the influence and moving cannabis across stateliness.
This document, the Treasury Department’s Financial Crimes Enforcement Network- known as FinCEN- set out a course for banks and credit unions to set up accounts for cannabis businesses without breaking federal law. FinCEN has been allowing businesses and financial institutions to conduct financial transactions and business in a legal and safe manner. This safety has kept cash transactions to a minimum and kept fraud-related crimes at bay. By keeping these banking guidelines as they are, the smaller businesses will be persuaded to invest capital in a wiser manner and the market would be easier to regulate. Taking away this guidance could leave the financial market vulnerable.
The current Trump administration is still deciding whether or not to retract the banking guidelines or not and deputy secretary for the Treasury Department, Sigal Mandelker, has said in a statement last month that the guidelines will be in place until a decision has been reached.
When established in 2014, the FinCEN guidelines were meant to provide clarity and transparency. Banks and credit unions were required to keep reports on all marijuana business patrons. However even with this procedure in place, many cannabis traders and companies had been met with resistance from some financial institutions still unsure of cannabis business being legit. With the federal fear looming over the bankers’, willingness to cooperate and conduct business with cannabis industry tradesmen has not been unanimous.
However as with every new idea and myth debunked, it has steadily become a more comfortable business venture for banks as FinCEN recently revealed in statistical data documenting the marijuana industry. Banks and their enthusiasm to work with cannabis businesses have gradually increased as the general marijuana awareness across the United States becomes clearer. This data was collected before the announcement to possibly revoke the state banking protection.