Report Finds Marijuana Banking Bill Insufficient

Legislation to allow credit unions and banks to serve certain cannabis-related businesses is insufficient according to a policy center report. Learn why.

David Baumann


Aug 16



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David Baumann

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David Baumann

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Legislation that would allow credit unions and banks to serve certain cannabis-related businesses doesn’t go far enough according to policy center findings.

The marijuana banking legislation passed by the House would not significantly improve the problems cannabis-related businesses face in trying to establish banking services, researchers at the Drug Enforcement Policy Center at Ohio State University’s Moritz College of Law said in a just-released report.

SAFE would maintain financial institutions’ discretion to decide whether to serve a particular client or industry,” the report, released in conjunction with the Cannabis Regulators of Color Coalition, stated.

The report continued, “Because the application of this discretion is highly dependent on perceptions of risk and profit—both of which are impacted by cannabis’s federally illegal status—the bill is unlikely, without more comprehensive reforms, to significantly change existing issues related to access and equity for small cannabis businesses that currently have inadequate access to banking services or loans.”

Background on Issue

The House has passed legislation that would provide credit unions and banks with a regulatory safe harbor if they provide financial services to marijuana-related businesses in states where cannabis is legal. The Senate has not passed the bill, with leading Senate Democrats saying that cannabis banking issues should be addressed in a comprehensive marijuana legalization measure.

However, one of those Democrats, Sen. Cory Booker, D-N.J., recently said he might be willing to compromise on a smaller measure.

Changes Called For in Report

The Ohio State researchers asserted however that the banking legislation does nothing to address existing inequities in the financial services industry. They added that without amendments to address equity issues, small and minority-owned cannabis businesses are likely to be denied the full range of services offered to others.

The researchers offer a list of amendments they said would address equity issues.

One proposal would use federal funds to provide capital for businesses owned by people affected by the War on Drugs.

The researchers also said that MDIs and CDFIs should be explicitly protected as part of the banking plan. Those protections should assist those institutions in reducing the perception of regulatory risk associated with offering commercial banking services to small, minority-owned marijuana-related businesses, they asserted.

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