By: Nabil Rodriguez, Esq. & Victor Fox*
In a press release published by the House Committee on Appropriations on June 2, 2019, a 2020 Financial Services and General Government Funding Bill was announced. Currently unnamed, the resolution appropriates annual funding for the Department of Treasury, the Judiciary, the Executive Office of the President, and other independent agencies that provide financial services such as the IRS Section 633 of the resolution would allow financial institutions to provide services for marijuana businesses operating pursuant to state law, including Indian Tribes and the District of Columbia. Specifically, section 633 states:
“None of the funds made available in this Act may be used to penalize a financial institution solely because the institution provides financial services to an entity that is a manufacturer, a producer, or a person that participates in any business or organized activity that involves handling marijuana, marijuana products, or marijuana proceeds, and engages in such activity pursuant to a law established by a State, political subdivision of a State, or Indian Tribe: Provided, That the term ‘‘State’’ means each of the several States, the District of Columbia, and any territory or possession of the United States.”
Most recently, the House Appropriations Committee approved this resolution on June 11, 2019 with a vote of 31 to 21. It is worth noting, however, the resolution only covers the intuitions whose funds are appropriated under the resolution. Therefore, other governmental institutions with funds not appropriated under this resolution, including the Department of Justice, would still be allowed to pursue action against financial institutions providing financial services to marijuana businesses. Although this resolution is limited in scope, pending legislation on the horizon would definitively remedy this issue, specifically the Secure and Fair Enforcement (“SAFE”) Banking Act.
The SAFE Banking Act of 2019 is primarily intended to protect banking institutions that provide financial services to cannabis-related businesses operating within the parameters of state law. As a result, unlike the House committee resolution, this Act would harbor financial intuitions from punishment from government agencies including the Department of Justice. As of June 5th, 2019 the SAFE Banking Act has been placed on the Union Calendar (Calendar No. 78), and has received widespread bipartisan support including a letter to congressional leaders from attorney generals from 38 states urging Congress to pass the SAFE Banking Act in early May.
In the wake of the SAFE Banking Act, certain states have realized the practical and public safety necessities of allowing regulated cannabis businesses to have access to banking institutions and have started taking steps to providing the necessary bank access within their states. California Senate Bill 51, for example, would provide for the licensure and regulation of cannabis limited charter banks and credit unions for the purposes of providing banking services to cannabis businesses.
For further information on the status of the House Committee resolution, the SAFE Bank Act, or any other cannabis banking concerns and the impact it may be having on your business, please reach out to a Greenspoon Marder attorney.
*Victor Fox is not an attorney