The federal government unfairly punishes state-legal marijuana businesses whose owners have been convicted of marijuana-related crimes by banning them from loans and other banking instruments, a group of U.S. Senate and House Democrats has said. Have written a letter to the Treasury Department demanding a change in the policy.
The group of 20 lawmakers, who mostly represent states where recreational marijuana is legal, said in a letter Tuesday that the department’s Financial Crimes Enforcement Network’s 2014 guidance for raising “red flags” on marijuana businesses should guide businesses. Banking services harm your chances of securing a loan.
Lawmakers said the federal regulator’s warnings unfairly restrict access to the fast-growing industry, which is legal in many states.
“Under this red flag guidance, a marijuana business owner with a marijuana conviction may be allowed to participate in the state licensing program on paper, but in practice may be unable to access bank loans to expand his business. Can because it is considered high. Risk customers,” the lawmakers wrote.
For more than 10 years, Idaho marijuana legalization has failed. The 2023 season was no different.
“This guidance disproportionately harms businesses owned by people of color, who are more likely to have marijuana-related convictions, even though they are not more likely to break marijuana use laws,” the letter reads.
Senators Elizabeth Warren of Massachusetts, Jeff Merkley of Oregon, Raphael Warnock of Georgia and Representative Earl Blumenauer of Oregon led the letter, according to a release from Warren’s office.
Other signers include Sens. Cory Booker of New Jersey, Chris Van Hollen of Maryland, Amy Klobuchar and Tina Smith of Minnesota and John Fetterman of Pennsylvania and Rep. Val Hoyle of Oregon.
The group asked Treasury Secretary Janet Yellen and Financial Crimes Enforcement Network Director Andrea Gacki to update the guidance, which they noted preceded several state laws legalizing recreational marijuana.
Lawmakers wrote that the update would allow people who have been pardoned or convicted of a crime that is no longer considered a crime under their state law to receive financial assistance without a red flag from the federal government. Full access to services should be allowed.
Messages seeking comment from the Treasury Department and the Financial Crimes Enforcement Network were not returned Thursday.
Division among marijuana reform supporters
Access to banking is one of the challenges marijuana-related businesses face, even as many states moved toward decriminalizing or completely legalizing recreational use in recent years And it has become a multi-billion dollar industry.
Last year, 22 states generated a combined $3.8 billion in tax revenue from marijuana sales, according to the advocacy group Marijuana Policy Project. Recreational sales in Oregon alone are approximately $1 billion per year.
But because the banking system is largely federally regulated, and marijuana is still illegal nationally, marijuana-related businesses have trouble gaining access to banking services like small business loans.
This leaves prospective business owners without the necessary capital to start a business. Existing businesses may carry excessive amounts of cash, making them more vulnerable to theft or robbery.
But efforts to address banking-related issues alone have divided supporters of marijuana reform.
Booker, Wyden and Senate Majority Leader Chuck Schumer of New York introduced a sweeping marijuana overhaul bill last year that would completely decriminalize the drug.
Booker and Warnock have opposed bipartisan efforts to tackle access to financial services alone, arguing that such reforms would benefit large marijuana businesses and be unfair to the largely Black and Latino population who still have access to them. People are facing the consequences of marijuana-related convictions in states where it has since become legal.
“My fear is that if we pass this legislation, if we greenlight this new industry and the fees and profits from it without helping the communities that support it, we will make the rest more comfortable,” warnock said at the September hearing On a bill to reform marijuana banking laws.
He added, “And I don’t see any historical evidence to suggest that when we do that we’ll go back and get the people left behind.” “I don’t believe in trickle-down economics, and I don’t believe in trickle-down justice.”
The Senate Banking Committee approved the marijuana banking bill on September 28 by a bipartisan 14-9 vote. It did not get a floor vote.
Spokespeople for Warnock did not respond to messages Thursday seeking comment on the Treasury letter.
Booker and Schumer had also opposed previous banking overhaul efforts, but Booker said the addition of this year’s version of the bill, which he sponsored, would provide grants to help states eliminate marijuana convictions. To, made the bill worthy of support.
Spokespeople for Booker did not return messages seeking comment Thursday.
“I am grateful to my colleagues for working with me to include key provisions in this bill that will increase access to capital for small and minority-owned businesses and disadvantaged communities,” he said in a statement a week later. Will increase banking services for the Before the committee votes. “Even after passage of this bill, much more must be done to reverse the many injustices of our country’s failed marijuana policies.”
Get morning headlines delivered to your inbox