Thirty-seven states, the District of Columbia, Guam, and Puerto Rico, have legalized cannabis to some degree. While in those 37 states and territories, it may be legal to some degree, the federal government still regulates cannabis as a controlled substance, banning its use. The contradictions on the state and federal levels involving the legality of cannabis mean any contact with money that can be traced back to cannabis businesses could be considered money laundering and expose a bank to significant legal and regulatory risk. At the federal level, The Secure and Fair Enforcement (SAFE) Banking Act would allow banks to do business with cannabis businesses within states that have legalized cannabis, changing how the cannabis industry operates. However, many states are looking to introduce various pieces of legislation surrounding cannabis banking themselves.
Indiana Cannabis Banking Bill
On January 1, 2023, State Senator Niezgodski authored Senate Bill 336. The proposed bill aims to establish a legal framework for the production and sales of cannabis, which would also allow for the regulation of cannabis businesses in the state.
The bill also includes provisions for the banking processes required to ensure the legal transfer of funds between banking institutions. This could be a significant step toward providing clarity and stability to the cannabis industry in Indiana, which has been grappling with the challenges of operating in a legal grey area.
Maine Bill Directing Treasurer to Review Banking Needs for Cannabis Businesses
In Maine, on February 28, Senate Bill 788 was introduced. The bill would direct the State Treasurer to review options for meeting the banking needs of individuals and businesses involved in the banking of cannabis businesses, including adult-use and medical cannabis sectors. This banking solution will require the treasurer to submit a report based on banking solutions by December 6, 2023. The bill was referred to the Health Coverage, Insurance, & Financial Services Committee, where it received a divided report in early April.
Banking for Cannabis Businesses in Montana
On December 12, 2022, a Montana House lawmaker proposed House Bill 128. The bill’s goals are to generally revise Montana’s cannabis laws, with a few mentions of banking for cannabis businesses. The first regulations would require a report from the division of banking and financial institutions regarding cannabis. The bill also would require “qualified institutional investors” to regulate the banking of cannabis sales, which would include a bank or banking institution, including any bank, trust company, a member bank of the federal reserve system, bank and trust company, stock savings bank or mutuals savings bank that is organized and doing business under the laws of the state. The bill passed the state House in early April.
New Jersey Cannabis Banking Legislation
In June 2022, New Jersey lawmakers introduced A4263. The bill would authorize financial institutions and insurers to provide financial or insurance services for legitimate cannabis-related businesses. Most recently, the bill was reported out of the Assembly committee with amendments and referred to the Assembly Oversight, Reform, & Federal Relations Committee.
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