Less than a month after holding a fundraiser on the sidelines of a Colorado marijuana conference, Sen. Rand Paul, R-Ky., is joining the fight to give America’s growing legal marijuana industry access to banking services.
Paul, the first major-party presidential candidate to publicly seek support from legal marijuana industry, is among the bipartisan co-sponsors of the Marijuana Businesses Access to Banking Act of 2015, introduced Thursday in the Senate.
Similar legislation has already been re-introduced in the House after a previous effort to ease access to banking for marijuana companies failed.
The Senate bill would prohibit banking regulators from penalizing or discouraging banks from providing financial services to marijuana businesses operating in areas of the U.S. where marijuana has been legalized.
It also would ban regulators from terminating federal deposit insurance at banks providing services to state-sanctioned marijuana businesses and would create a safe harbor from criminal prosecution, liability and asset forfeiture for financial institutions who provide services to marijuana businesses operating legally.
“It’s time to let banks serve these legal businesses without fearing devastating reprisals from the federal government,” Oregon Democrat Jeff Merkley said in a statement.
An industry awash in cash
Marijuana has been legalized for recreational use in four U.S. states and in the District of Columbia. Another 23 states and Puerto Rico have legalized medical marijuana. Marijuana is still illegal under federal law and many businesses have reported trouble finding banks willing to work with them.
A Colorado credit union that had hoped to serve the industry has yet to receive the go-ahead from banking regulators.
Meanwhile, America’s emerging marijuana moguls are forced to use cash even for large transactions, a predicament that has led to the rise of several cannabis security companies whose focus is helping keep all that cash — and whomever is transporting it — safe.
Beyond safety risks, Merkley in a news release noted that marijuana’s status as an all-cash business complicates government efforts to collect taxes on what’s becoming an increasingly important source of revenue to municipalities.
Rand Paul and pot
It's not yet clear how much Paul's endorsement will help, but Paul has been a vocal critic of the "War on Drugs." He is backing separate legislation to reclassify marijuana according to the Controlled Substance Act and exempt from federal law people growing, distributing or using medical marijuana in states that have legalized it.
That likely helped Paul rise to the top of the Marijuana Policy Project's ranking of 2016 presidential candidates based on their stances on marijuana policy.
Paul received an "A-" from the lobbying group, which cited his support of states' rights in establishing marijuana policies and for his support of lowering criminal penalties for marijuana possession.