Bankers' pot push gets boost from blue wave, Sessions ouster

By ZACHARY WARMBRODT
Source: politico.com


One of the arguments for providing the federal OK for banks to work with marijuana-related businesses is that companies have been forced to hold large amounts of cash because they can’t put it in bank accounts, putting them at risk of theft and violence. | Jeff Chiu, file/AP Photo

‘There’s no question: Cannabis prohibition will end,’ one House Democrat said.


Banks haven’t been able to cash in on marijuana money, but there’s new momentum to change that with Democrats about to take charge of the House.

With anti-pot Attorney General Jeff Sessions gone and even more states legalizing weed, bankers who have grown increasingly frustrated by legal restrictions on the cannabis business are working with Democrats and Republicans to change laws curtailing transactions that deal with marijuana.


The new push by banks to handle financial transactions for the pot industry is the latest sign that politics of marijuana are rapidly changing in the nation's capital, as voters across the country back legalization.

Rep. Ed Perlmutter, a Colorado Democrat who has taken the lead on legislation in the House, said there was "a real opportunity" to move a bill aligning federal and state marijuana laws for banks and credit unions.

"I don't think there's any doubt about it," said Rep. Denny Heck (D-Wash.), who is co-sponsoring Perlmutter's bill.

Lenders are asking Congress to enact a safe harbor for banks and credit unions to serve marijuana businesses because the drug remains illegal at the federal level. The prohibition has made bankers concerned that they'll face penalties from their federal regulators for taking money from the cannabis industry even in states where the sale of weed is legal.

"We now have, I think, close to a majority of the nation's population that lives in states where some form of access to marijuana is legal," Heck said. "The businesses that either grow it or process it or retail it are operating under this terrible cloud because banks and credit unions aren't quite sure what the federal regulators will do to them if they provide those services."

Before this month's elections, some Democrats were already drawing up plans to tackle the issue if they won back the House. Rep. Earl Blumenauer (D-Ore.) released a memo containing a committee-by-committee breakdown and timeline outlining how to move ahead with legislation that would feed into a package of cannabis reform bills.

"There’s no question: Cannabis prohibition will end," Blumenauer wrote. "Democrats should lead the way. If we fail to act swiftly, I fear as the 2020 election approaches, Donald Trump will claim credit for our work in an effort to shore up support — especially from young voters."

While a comprehensive approach to pot might be a heavy lift, there is some hope among supporters of marijuana banking legislation that it's narrow enough to get traction in the next Congress.

Compass Point analyst Isaac Boltansky puts the odds of cannabis legalization at 25 percent but pegs the likelihood of banking-related legislation passing at 75 percent.

"I doubt we will see the green-sky scenario of federal legalization, given the divided Congress and the inherent incrementalism of this issue," he said. "But a banking fix is clearly in striking distance for the next Congress."

Banks have been gearing up for this moment. The Independent Community Bankers of America and the Credit Union National Association for the first time recently endorsed bills to ease rules for cannabis banking.