Can “Green Banking” Be a Possible Solution to Marijuana Industry Money?
Friday, January 12, 2018
By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law
On December 22, 2017, California announced a possible solution to the problem of banks being unwilling to handle money from the legal marijuana industry. Talks are underway between the state, banks and federal regulators on a plan to allow banks to serve a marijuana market that is expected to grow to $7 billion annually by 2020 in California. Starting January 1, 2018, it will be legal to grow and sell marijuana for recreational and medical uses in California. According to officials, “green banking” would be the first system of its kind in the United States.A Possible Solution?If the proposed solution works, it could eventually mean patrons could use a credit card to buy marijuana. Currently, purchases must all be made in cash. For those who live near marijuana shops, the new banking system could mean fewer robberies and less violence. State officials say without banks taking marijuana money, thousands of cannabis businesses will be storing and transporting billions of dollars in cash.Marijuana remains illegal under federal law, therefore, federally regulated banks have refrained from handling proceeds from the marijuana industry.The Green Banking Proposal. According to officials, the proposal will designate one bank as a central correspondent bank that would hold accounts from other banks that are doing business with marijuana firms. When a marijuana retailer wants to pay a distributor for a crop, the transaction would go from the retailer’s bank through the central correspondent bank. This would instantly clear payment through the distributor’s bank. Setting up a clearinghouse for marijuana industry money would allow the state to provide a second level of compliance oversight to ensure restrictions set by the federal government are followed. Additionally, suspicious activity reports are filed and the number and scope of transactions through the central bank are tracked. Hezekiah Allen, head of the California Growers Association, said the idea is “clearly the most feasible, most direct path to expanded banking services.” Some banks have already expressed interest in participating. The state will now await decisions by the boards of directors of banks that are willing to voluntarily participate in such a network. It will be up to those banks to design the network with contracts.To find out more about a possible banking solution for the marijuana industry, click here to read one of my prior blogs. To stay on top of marijuana policies and regulations, check our Marijuana Law Blog regularly.
Will Trump's Reversal of Federal Policy Kill All of the States' Activities Relating to Marijuana?
With the recently announced reversal of years of federal policies regarding heavy-handed federal enforcement of marijuana laws by President Trump, the significant question is will this completely kill all actions that have been taken by the states to legalize and regulate it? This may very well be the consequence. Well, so much for states' rights, huh? Guess the Republicans weren't so much in favor of states' rights after all?
Not to mention what becomes of all of the capital investments and tax money attributable to the now legalized marijuana trade in many states. Oh well, it's just money? Or is it? Such a reversal will seriously impair many very ill people, especially children, who are able to obtain relief from seizures, cancer and other illnesses by no other means. Will Congress have the courage to pass legislation in favor of allowing states to make these decisions? I wouldn't count on it the way Congress is stacked right now.
Contact Experienced Health Law Attorneys for Medical and Recreational Marijuana Concerns.The Health Law Firm attorneys can assist health care providers and facilities, such as doctors, pharmacists and pharmacies, wanting to participate in the medical marijuana industry. We can properly draft and complete the applications for registration, permitting and/or licensing, while complying with Florida law. We can also represent doctors, pharmacies and pharmacists facing proceedings brought by state regulators or agencies.
To contact The Health Law Firm please call (407) 331-6620 and visit our website at www.TheHealthLawFirm.com.Sources:McGreevy, Patrick. “California considers “green banking” as it transitions to adult-use marijuana.” The Denver Post. (December 22, 2017). Print.“California considers ‘green banking’ as it transitions to fully legal pot.” Los Angeles Times. (December 22, 2017). Web.About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.
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