The uneasy relationship between cannabis and the banking industry could improve if Illinois State Treasurer Michael Frerichs has anything to do with it.
Frerichs issued a press release Monday, urging the Trump administration to give clear guidance to financial institutions regarding medical marijuana. In his letter, he urged President Trump to reassure banks that they will not face penalties or prosecution for doing business with state-licensed marijuana growers and dispensaries.
“Medical marijuana is not right for everyone. However, its positive results for those with debilitating conditions, including Veterans and children threatened by seizures, are undeniable,” Frerichs said. “Updating our banking laws to embrace commonsense change will allow Illinois to properly manage this reasonable program, guarantee uninterrupted access to medical users, and protect financial institutions that serve the industry.”
The nomination of Jeff Sessions as attorney general has marijuana advocates unsure if he’ll reverse President Obama’s directive not to enforce federal marijuana laws. Federal law prohibits banks from processing money from the legal marijuana industry, making day-to-day transactions difficult. Most dispensaries work on a cash-only basis, and business owners have difficulty opening checking accounts and securing loans. The current system also makes it difficult for states to audit sales, verify taxes are collected, and encourages a gray market and criminal activity.
Lack of access to banking has been a thorn in the side of the legal marijuana industry since its inception. Even ancillary cannabis businesses have difficulty accessing banking services to send or receive payment. Frerichs press release notes that “most refuse to provide banking services to those in the medical marijuana industry while smaller community banks do so with great trepidation. The lack of full engagement hobbles the industry despite the availability of marijuana in 27 states.” Currently, marijuana is still considered a Schedule I drug under federal law.