Treasury Secretary Steve Mnuchin testified during an appearance before House Financial Services Committee about the Financial Stability Oversight Council’s (FSOC) annual report. During his testimony, he addressed cannabis and banking saying, “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.”
He also said, “We are reviewing it with the intent not to take it down without a replacement.”
A copy of the clip can be watched here.
Robert Fireman, CEO of MariMed Inc, (MRMD) a firm which has established cannabis cultivation and dispensary facilities in 6 states and distributes branded precision dosed products in numerous states, voiced his support for government efforts to enable the cannabis industry to use traditional banking:
“Banks play a major role in all business. Marijuana is classified as a Schedule I drug under the federal drug control regulations has been a barrier for most banks to provide needed financial services to the cannabis industry. In many states, cannabis businesses cannot obtain banking accounts to make deposits or issue checks and wires for payables. Most banks refuse to provide even secured loans to own and develop cannabis facilities. Banks who have mortgages on commercial and industrial buildings consider it a default if these business owners lease any part of property to cannabis business. Currently, having to deal with lots of cash presents security issues that other businesses do not have. Conventional banking will be a great benefit to this emerging cannabis industry as it tries to become more mainstream in the 29 states that now have some form of legal cannabis.”
Here are some additional reactions from marijuana industry entrepreneurs and leaders
Wil Ralston, President of SinglePoint (SING): “This is a great step in the direction of enabling cannabis-based businesses to access to traditional banking. We believe this further legitimizes the industry and again shows the need for a solution in a heavy cash-based business.”
Bryan Meltzer, Partner at Feuerstein Kulick LLP: “Although far from concrete, Secretary Mnuchin’s testimony today was encouraging because he appears to understand that limiting access of state-compliant cannabis businesses to the banking system is not in the federal government’s interest and is harmful to public safety. We hope that Secretary Mnuchin follows through with his testimony by causing the Treasury to adopt guidance and regulations that add some protection and certainty to banking in the cannabis space, but ultimately this is an issue that will require Congress to act on.”
Arnaud Dumas de Rauly, Chief Strategy Officer for The Blinc Group: “Mnuchin’s testimony to the House Financial Services Committee revealed his intentions to ‘collect our necessary taxes and other things’ with regards to allowing cannabis companies to benefit the traditional banking system. This is a game-changing statement which underlines the federal government’s intentions with regards to our industry. Its implications are numerous, spanning from simple credit card transactions to multi-million dollar funding deals, all the way to public listings for canna-businesses. Now is the time to get our ducks in a row; as soon as the Federal Government puts this play into action, regulation, compliance, and standards will follow and become the key to business sustainability. On the other hand, when he refers to ‘other things,’ I can’t help but wonder if he’s referring to making marijuana plant deposits in their vaults.”
Matthew Singer, CEO of tökr: “Positive movement in the push for legitimizing the cannabis industry. More and more states are legalizing cannabis; the sooner the complaint businesses can get access to bank and financial services, the better for everyone.”
Mike Kramer, CEO of 420 Blockchain: “I, and what I imagine to be a majority of the cannabis industry clearly agree with Deputy Mnuchin. The reasons why money derived from cannabis sales should be in banks are obvious when it comes to trackable taxation, transparency, and safety. The government needs to see that cannabis companies are operating under state compliance laws in order to feel comfortable letting these organizations work with traditional financial establishments. After talks at Capitol Hill with various Congress members, I see an obvious desire to integrate my blockchain technology into states with legal cannabis sales to guarantee compliance. At this point, it isn’t a question of if or why we should let cannabis money in banks, but rather how can we get that money in banks as soon as possible? Everyone sees the need so it’s only a matter of time before that need must be met.”
Article by Debra Borchardt
Read the full article here.