On Monday, the governor of Pennsylvania signed a measure that contains safeguards for the state’s banks and insurers that do business with authorized medicinal marijuana firms.
Pro-legalization The Republican-controlled legislature sent a bill to Gov. Tom Wolf’s desk that he approved. The bill is identical to a standalone bill that was previously advanced before being attached to another bill.
The cannabis banking reform was approved by the Senate earlier this year and by a House committee last month as a stand-alone proposal. Sen. John DiSanto (R), the principal sponsor, later included it as an amendment to HB 311, which has already been enacted and deals with allowing some financial institutions to run savings marketing campaigns.
As Congress continues to put off passing a federal solution, states are working to protect financial institutions that are willing to serve the cannabis market. Another example of this is the Pennsylvania cannabis legislation.
The amendment included in the passed legislation won’t shield banks and insurers from potential federal consequences, but it’s a stopgap measure meant to reassure the financial industry that they at least won’t be subject to state law penalties.
A “financial institution authorized to conduct business in this Commonwealth may provide financial services to or for the benefit of a legitimate cannabis-related business and the business associates of a legitimate cannabis-related business,” according to the law. The same safeguards will be codified for insurers as well.
It also states that banks or insurers will not be obligated to offer services to medical marijuana businesses.
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A financial institution or insurer cannot be “prohibited, penalized or otherwise discouraged from providing financial or insurance services to a legitimate cannabis-related business or the business associates of a legitimate cannabis-related business,” according to the law.
Additionally, it states that organizations cannot “recommend, incentivize or encourage a financial institution or insurer” to refuse services merely because a company is connected to marijuana.
Additionally, the language states that state agencies are prohibited from “taking unfavorable or corrective supervisory action on a loan given to a legal cannabis-related enterprise.”
In April, the House unveiled its own marijuana banking plan, which included tax relief measures for the sector that had been eliminated from the Senate version before it was passed.
Introducing state-level safeguards might increase pressure on Congress to implement a nationwide measure, like the bipartisan Secure and Fair Enforcement (SAFE) Banking Act, which has already passed the House six times in various forms but is now stalled in the Senate.
There were hopes that Congress would include the federal banking reform in the America COMPETES Act, a comprehensive manufacturing bill that is currently in bicameral conference, but leadership in both chambers reportedly recently agreed to keep that language out in order to hasten the passage of the more comprehensive legislation.
Separately, the House Rules Committee will decide on Tuesday if SAFE Banking, a recent change to a comprehensive defense package, is made in time for floor consideration. The banking idea may possibly be included in a group of incremental marijuana measures being discussed in high-level bicameral negotiations.
Additionally, in newly unveiled budget legislation, congressional leaders are recommending a number of marijuana policy reforms, including one that would offer financial safeguards to allow the cannabis business access to the banking system.
A group of Pennsylvania legislators adopted a second amendment last month that aims to allow medicinal marijuana firms to claim state tax deductions for costs that they are presently forbidden from doing so under federal tax law.
A larger tax code reform bill that passed the House Finance Committee included Rep. Aaron Kaufer’s (R) amendment.
The law would only affect the state taxes paid by medical marijuana businesses, so those companies would still have to deal with the Internal Revenue Service (IRS) code known as 280E, which prohibits businesses that deal with federally controlled substances from deducting significant amounts of income from federal tax returns. However, they could see some state help under the revised legislation.
Relatedly, the governor of New York recently approved a budget plan that, like the one mentioned above, allows marijuana enterprises to benefit from state tax credits that are available to businesses in other sectors, despite the fact that cannabis remains illegal on the federal level.
The National Credit Union Administration (NCUA) board member and former chairman Rodney Hood has emphasized numerous times the urgent need for a federal solution to the marijuana banking issue. Recently, he praised legislative efforts in states like Pennsylvania to address the problem within their borders, but he claimed that this wasn’t enough.
A group of mayors from all over the country recently passed a resolution pleading with Congress to pass legislation shielding banks that do business with state-legal marijuana businesses from federal penalties.
Recently, a group of marijuana regulators from 40 U.S. states and territories briefed congressional lawmakers on the implications of the current lack of access to traditional financial services, not just for the businesses and programs they oversee but also for the regulators themselves as they navigate this federal-state conflict.
In the meanwhile, a Senate committee in Pennsylvania last week passed a plan that would exclude medicinal marijuana users from DUI prosecution unless they are driving while intoxicated.
In June 2020, Bartolotta unveiled an early version of her legislation. The state must “guarantee that the legitimate use of this drug does not result in a criminal conviction,” she stated at the time.
The Pennsylvania House adopted a separate amendment that would have implemented the policy change months after the standalone reform legislation was proposed, but it was not made into law.
In 2016, Pennsylvania legalized medicinal marijuana; the state’s first dispensaries opened their doors in 2018. But such modifications have not yet been reflected in the state’s zero-tolerance DUI statute. The legislation puts nearly all medicinal marijuana users at danger, even if it has been days since their last use and they exhibit no indications of impairment, because it criminalizes the presence of any THC or its metabolites in a driver’s blood—which may be discovered for weeks after a person’s last use.