Because marijuana is still banned under federal law, involvement in the marijuana business poses a risk for banks, which face strict regulations against supporting illegal activities and money laundering. 🪴
The Alabama Medical Cannabis Commission meets on Aug. 11, 2022 in Montgomery. Alabama became the 37th state to legalize medical marijuana when lawmakers approved a bill last year. But marijuana remains illegal under federal law as a Schedule I controlled substance, the most restrictive category.
Bank regulators and bank associations want Congress to provide clarity. The Secure and Fair Banking Enforcement Act would prohibit federal regulators from penalizing banks for providing services to legitimate cannabis-based businesses. But the bill has repeatedly stalled in Washington. Hill said the Banking Department’s message is that medical cannabis is legal in Alabama but that bankers should proceed with caution. He said that means a greater degree of due diligence than banks follow with most categories of prospective customers.
“Congress is the one that has to correct it and we’re working very hard with our national association to get Congress to change that,” Hill said. “Being a cash-based industry is more than an antiquated logistical problem in a world of digital commerce; it creates a 21st century Wild West in which armed hold ups and storefront heists are a daily industry reality,” Pellicciotti wrote.
“When you’ve got that hanging out there about the legality of it, the banks are in my opinion wise to step back and say, ‘I need some more guidance, I need some more clarity before I can do this,’” Latham said.“If I’m in the cannabis business and you are my landlord, are you impacted?” Latham said.
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