Last month U.S. Attorney General Jeff Sessions rescinded a memorandum released under the Obama administration that directed the Justice Department to refrain from interfering with state-level cannabis laws. Also under the Obama administration, the Department issued a document, which essentially has allowed banks to open bank accounts with marijuana businesses without fearing retaliation by federal regulators. With Sessions’s rescission last month, lawmakers are voicing concern and fear that the banking document may be abandoned next.
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If the banking document is also nullified, cannabis industry operators who are compliant with their state’s marijuana laws will be facing substantial hardship in storing their profits with banks.
A bipartisan group of thirty-one House of Representative members wrote to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) last month, requesting that the agency uphold the 2014 banking guidance. The House lawmakers wrote, “Leaving your guidance unchanged will continue to encourage small companies to make investments by freeing up access to capital. It will also further provide for well regulation and oversight through suspicious activity reports. Rescinding this guidance would inject uncertainty in the financial markets.”
Last Wednesday, the U.S. Treasury Department’s assistant secretary for legislative affairs, Drew Maloney, wrote a letter to members of Congress informing them that they are reviewing the banking document “in light of the Attorney General’s announcement.”
On Tuesday of this week, Treasury Secretary Steven Mnunchin testified before the House Financial Services Committee at the Annual Report of Financial Stability Council hearing, appearing to advocate marijuana businesses’ abilities to bank.
Mnunchin declared, “We want to make sure that we can collect our necessary taxes and other things.”
What these “other things” are is not entirely clear.
Mnunchin also explained that the Treasury Department is evaluating the concern of lawmakers about the public safety trepidations that would result in barring marijuana businesses from storing their profits with banking institutions. This in turn would force these businesses to operate on a cash-only basis.
Although Mnunchin emphasized that the Department is “sensitive to the issue of dealing with the public safety” involved with denying marijuana businesses access to banks, Mnuchin also seems be indicating that the intent is to take down the banking memo, just not until they can come up with something else.
Even so, Mnuchin also stated at the hearing, in reference to Sessions’s rescission last month, “I did not participate in the Attorney General’s decision and what he did, but we are consulting with them now. We do want to find a solution to make sure that businesses that have large access to cash have a way to get them into a depository institution for it to be safe.”
It is true that FinCEN released documents late last year that indicated a steady growth in the number of banks willing to work with marijuana businesses; however, these documents detailed data that was collected before the Sessions’s rescission.
With the persistence of the Trump Administration’s resistance to legal marijuana businesses, awareness of and complete compliance with the law is critical for cannabis industry operators. Marijuana business attorney Charles Feldmann, a former DEA task force commander, is constantly advising his clients on achieving and maintaining strict compliance with state-by-state marijuana rules and regulations and helping his clients build a solid federal risk mitigation plan. Mr. Feldmann’s background in state and federal law enforcement allows him to thoroughly and aggressively help his clients mitigate the risks involved with operating in the cannabis industry.