Bankers back bill to let states determine marijuana rules

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WASHINGTON — A broad bill to enable businesses to skirt the federal ban on marijuana in states where it is legal has been reintroduced in the House and Senate and is building support in the banking industry.

The bill, which was first unveiled last year, comes in the wake of a House effort to pass a more targeted bill for the banking industry that would make it illegal for a federal regulator to penalize an institution that accepts insured deposits from state-approved cannabis businesses.

The new bill, known as the Strengthening the Tenth Amendment Through Entrusting States Act, is sponsored by Sens. Cory Gardner, R-Colo., and Elizabeth Warren, D-Mass. A companion bill was also introduced by Reps. Earl Blumenauer, D-Ore., and David Joyce, R-Ohio, in the House.

Their legislation would essentially exempt businesses from the federal prohibition on marijuana in states that have legalized the substance.

Up to now, the banking industry has more vocally supported the financial services-focused bill in the House, but the sector also applauds the STATES Act.

"While ABA does not take a position on the legalization of cannabis and the STATES Act is not a banking specific bill, removing the federal prohibition on cannabis in states that have legalized its use would allow banks to accept deposits and provide basic financial services to state licensed cannabis businesses and their service providers," Rob Nichols, president and CEO of the American Bankers Association, wrote in an April 3 letter to Gardner, Warren and other supporters of the bill. "That, in turn, would help those communities reduce cash-motivated crimes, increase the efficiency of tax collections, and improve the financial transparency of the cannabis industry.”

Specifically, the bill amends the Controlled Substances Act so that its provisions no longer apply to any person acting in compliance with state or tribal laws relating to the manufacture, production, possession, distribution, dispensation, administration or delivery of marijuana.

In a provision aimed specifically at financial services, the bill would assert that compliant transactions are not trafficking and do not result in proceeds of unlawful transaction.

The legislation also maintains the prohibition on employing people under the age of 18 in marijuana operations and does not allow for the sale or distribution of marijuana at transportation safety facilities under the age of 21.

It also instructs the Government Accountability Office to conduct a study on the effects of marijuana legalization on traffic safety.

The bill comes after the House Financial Services Committee passed the other more banking-specific bill known as the Secure and Fair Enforcement Banking Act. Nearly a dozen Republicans on the committee supported the SAFE Banking Act, joining all of the committee’s Democrats. The bill was largely supported by the banking industry as well.

But much of the Republican opposition to the SAFE Banking Act is that there is still a conflict between the federal ban on pot and the laws in states that have legalized the substance for recreational or medical purposes.

Sens. Michael Bennet, D-Colo., Catherine Cortez Masto, D-Nev., Kevin Cramer, R-N.D., Amy Klobuchar D-Minn., Lisa Murkowski, R-Alaska, Rand Paul, R-Ky., Dan Sullivan, R-Alaska, and Ron Wyden, D-Ore., have also signed on as co-sponsors of the STATES Act.

"Our federal marijuana laws are outdated and pose a threat to our public health and safety. Marijuana should be legalized, and we must reverse the harm of these failed policies by wiping clean the records of those unjustly jailed for minor marijuana crimes," Warren said. "Congress should take immediate action on these important issues by passing the bipartisan STATES Act and protecting states, territories, and tribal nations as they implement their own marijuana laws without federal interference."

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Marijuana industry Marijuana banking Regulatory reform Regulatory relief Elizabeth Warren Rob Nichols American Bankers Association