Pub. 14 2019-2020 Issue 1

WWW.NEBANKERS.ORG 12 WASHINGTON UPDATE W HILE THERE IS STILL a healthy — and ap- propriate — debate on whether canna- bis should be legalized at the federal level, there is growing consensus that something must be done to address the cannabis conundrum affecting banks. The need for a solution is growing increasingly urgent. With marijuana now legal in thirty-three states and the District of Columbia in some form — a number that is likely to grow — more banks are hav- ing to choose between serving the banking needs of their customers and community, and following federal law. Even banks that have no de- sire to bank amarijuana grower or dispensary are at risk of vio- lating anti-money laundering laws if an existing customer is found to have a tangential con- nection to a cannabis business. In fact, a recent ABA survey found that three in four ABA members have had to close an existing account, terminate a banking relationship or turn away a potential customer because of a connection to cannabis. These include a bank that ended its relationship with a retail strip mall after it leased space to a medical marijuana shop and another that turned down a loan to a fencing com- pany that was hired to build a fence around a marijuana Solving the Banking Industry’s Cannabis Conundrum Rob Nichols, President & CEO, American Bankers Association growing facility. Some banks have even had to end longtime customer relationships with law firms because those firms took on marijuana businesses as clients. Leaving the cannabis industry — whose sales are estimated to reach $24 billion by 2025 — unbanked has troubling implications. Such businesses have resorted to dealing entirely in cash, which can make them lucrative targets for criminals and create potential public safety risks for local communities. They are also harder to monitor for compliance with tax laws or irregular financial activity.