Opportunities for Marijuana Establishments to Access Financial Services: Recent Advancements at the State and Federal Level
Proposed Legislation in Maine
Currently, marijuana businesses and their employees are not able to deposit funds from their businesses into federally insured financial institutions or obtain loans from financial institutions because marijuana remains illegal at the federal level. The result is that these businesses are cash-only businesses whose only access to capital is through private-equity. This has had a significant impact on marijuana businesses operating in compliance with Maine law across the state.
On Tuesday, March 26th a bill introduced by Representative Berry of Bowdoinham (LD 1402) was released in the Maine State Legislature in an effort to expand state legal marijuana businesses’ access to financial services. Specifically, LD 1402 would allow state-chartered credit unions to obtain private deposit insurance, which would in turn make it possible for state credit unions to provide financial services to dispensaries and caregivers that have been registered under Maine’s medical marijuana program. The bill will also apply to any marijuana establishment that receives a license from Maine’s adult use program in the future. In addition, the bill creates opportunities for employees of these businesses to access state credit unions. It is unclear whether this bill pertains to financing, but it may remove one barrier preventing marijuana businesses from getting business loans in the future (although credit unions may still have other business-related reasons for declining to loan to marijuana businesses).
While this bill would be a huge step forward for the legal marijuana industry in Maine, the current version of the bill omits coverage for medical marijuana manufacturing and testing facilities. We suspect this omission was an oversight rather than an intentional exclusion, and Drummond Woodsum will submit testimony advocating for an amendment to the bill that would expand coverage to all marijuana establishments that have been authorized to operate under state law.
The full text of the emergency legislation may be found here . As emergency legislation, the law would immediately go into effect (rather than becoming effective 90 days after adjournment) and will require approval by 2/3 of the State Legislature.
Proposed Legislation in Congress
Progress is being made at the federal level as well. On Friday, March 28th the House Financial Services Committee voted to advance the Secure And Fair Enforcement (SAFE) Banking Act to the full legislative body for consideration. Under the approved bill, federal banking regulators would not be able to punish financial institutions just because they work with marijuana businesses that are legal under state, local, or tribal laws. Currently, the bill has 152 cosponsors, including 12 Republicans, which is the most support any standalone piece of marijuana legislation has received in Congress to date.