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As President Donald Trump affirms that his administration is \u201cvery strongly\u201d considering a proposal to reschedule marijuana<\/a>, bipartisan senators raised the issue during a hearing with a former state cannabis regulator who testified<\/a> about the unique challenges federal prohibition imposes on state regulators.<\/p>\n While attention within the cannabis community is largely focused on a potentially historic rescheduling decision by Trump, the Senate Banking Subcommittee on Financial Institutions and Consumer Protection on Tuesday discussed the adjacent issue for the marijuana industry: The lack of banking access for cannabis companies under federal prohibition.<\/p>\n Tyler Klimas\u2014who served as\u00a0executive director of the Nevada Cannabis Compliance Board (CCB)<\/a> and was a founding member of the Cannabis Regulators Association (CANNRA) before becoming the founder of Leaf Street Strategies\u2014testified before the panel as the Democratic minority\u2019s witness.<\/p>\n Sen. Catherine Cortez Masto (D-NV), the Democratic ranking member of the panel, said that \u201cwe want to make sure that all Americans have a fair access to banking,\u201d and that includes state-regulated marijuana businesses such as those in her state.<\/p>\n \u201cThere are so many Nevada business owners who have opened legal cannabis businesses and created jobs across our state,\u201d the senator said, adding that she also hopes Congress will pass a bipartisan bill titled the Secure and Fair Enforcement Regulation (SAFER) Banking Act<\/p>\n \u201cEven if the president reschedules marijuana, that will not address the limits on banking services that are harmful for our Nevada cannabis growers and retailers, as well as others in the cannabis industry across the nation,\u201d she said. \u201cIn 2026 I hope we hold more discussions on addressing banking by cannabis businesses and strengthening consumer protection.\u201d<\/p>\n Chairman Thom Tillis (R-NC)\u2014who has stood out among his Republican colleagues as someone who\u2019s backed regulating cannabis to some extent at the federal level<\/a>\u2014said he \u201cabsolutely\u201d agreed with the ranking member that the marijuana banking issue should be addressed.<\/p>\n \u201cI mean, we\u2019ve got to realize that two-thirds of the states have legal cannabis operations\u2014either medicinal or recreational. I\u2019m a free market capitalist,\u201d he said. \u201cWhether or not I agree with a given market activity, if it exists, the federal government should exist to regulate it and also [prevent] bad actions.\u201d<\/p>\n The chairman said, however, that he\u2019s \u201cnot quite there on the SAFER Banking Act,\u201d because he feels it serves as a \u201cforcing mechanism for a more comprehensive framework.\u201d And he remains concerned about how to strike the right regulatory balance to permit licensed marijuana businesses to bank while preventing certain industry marketing tactics\u2014such as advertising products that look like Oreos\u2014that might make their products appealing to youth.\u201d<\/p>\n \u201cAll of this stuff is Wild Wild West right now,\u201d Tillis said, \u201cand we\u2019ve got to get it under control.\u201d<\/p>\n Klimas, for his part, said in testimony submitted to the subcommittee that \u201cno discussion of this issue is complete without addressing the challenges facing the cannabis industry and the role policy solutions like the SAFER Banking Act can play in addressing them.\u201d<\/p>\n \u201cToday, 40 states and territories have developed regulated cannabis markets, supporting hundreds of thousands of jobs and generating billions in state tax revenue. Yet many of these state-legal businesses continue to struggle to access basic financial services,\u201d he said. \u201cAs a result, they remain cash-intensive, creating a significant public safety risk and an economic burden on small and medium-sized businesses that already operate on thin margins.\u201d<\/p>\n He added that the enactment of the SAFER Banking Act would \u201cprovide the certainty financial institutions need to serve this growing industry, while also making communities safer and improving transparency and accountability in the marketplace.\u201d<\/p>\n Klimas emphasized that, beyond the financial consequences for state-licensed cannabis businesses, current policy complicates the job for state regulators.<\/p>\n \u201cIn Nevada, our regulation of cannabis risked disrupting the state\u2019s entire relationship with its banking partner, forcing us to spend countless hours to find creative workarounds and issue guidance to the industry on what language to avoid putting on payment notices,\u201d he said. \u201cInstances like these are common in other states.\u201d<\/p>\n Noting recent developments at the federal level\u2014with Trump confirming active consideration of rescheduling marijuana from Schedule I to Schedule III of the Controlled Substances Act (CSA)\u2014the former state regulator said the reform would represent a \u201cmonumental recognition of the medical benefits of cannabis and an opening of pathways to more research and better public health policy.\u201d<\/p>\n However, \u201crescheduling alone does not alleviate the current banking challenges nor does it have any impact on safe harbor for financial institutions,\u201d Klimas said. \u201cCongressional action is still needed, perhaps now more than ever.\u201d<\/p>\n (Disclosure: Klimas supports Marijuana Moment\u2019s work via a Patreon pledge<\/a>.)<\/p>\n He added that without \u201cgreater engagement by financial institutions, we are also left with a growing lack of insight and transparency into licensed operators in state markets.\u201d<\/p>\n \u201cThis, too, directly impacts public safety. In Nevada, we drew from our world-renowned gaming regulatory model, to implement one of the nation\u2019s most comprehensive cannabis investigations divisions. We understood the importance not only of compliance, but of understanding exactly who was operating in our state industry and ultimately who was profiting from it. While states enjoy incredible insight into supply chains through mandatory tracking systems, reconciling that information with the financials of companies that have difficulty maintaining banking relationships, or deal mainly in cash, makes that job extremely difficult.\u201d<\/p>\n Consequently, \u201cthis creates opportunity for bad actors to exploit the lack of transparency and challenges in oversight, simply because we have yet to fill this policy gap,\u201d he said.<\/p>\n Many banks continue to resist accepting even state-licensed cannabis businesses as clients because of the potential risk of federal enforcement action given that marijuana remains a Schedule I drug under the CSA. However, some banks and credit unions have taken that gamble<\/a>, while following Obama-era reporting guidance to mitigate the risk.<\/p>\n \u201cI understand the desire to put effort behind a more comprehensive federal regulatory framework for cannabis. That is a goal shared with most in this industry,\u201d Klimas said. \u201cBut each day we wait on commonsense measures like the SAFER Banking Act, we\u2019re hurting businesses, creating obstacles for employees trying to earn a living, and providing cover for bad actors to persist.\u201d<\/p>\n Notably, the former Nevada official said that the recent enactment of a spending bill containing provisions to recriminalize much of the hemp market means there\u2019s \u201ceven greater pressure and urgency on the need for legislation like the SAFER Banking Act,\u201d a bill that prevents federal regulators from penalizing banks simply for servicing licensed cannabis businesses.<\/p>\n \u201cThere are thousands of hemp companies that will be thrown into the same turmoil next November when the change in definition goes into effect,\u201d Klimas said.<\/p>\n \u201cEven when financial institutions do enter the space, they take on risk due to that uncertainty, risk that results in high administrative and compliance costs. These costs are then passed on to cannabis businesses in the form of high fees. And for the cannabis businesses that do find banking partners, many must look outside of their state to do so. In many cases, the full suite of banking services a normal business would expect, like lending and credit products, are unavailable to cannabis banking customers, despite the high cost of fees.\u201d<\/p>\n \u201cBusinesses that support or engage with the cannabis industry, like industrial suppliers, agriculture vendors, commercial and industrial real estate firms, and even automotive dealers, fall victim to many of the same banking challenges because of their association with cannabis,\u201d he said, concluding that \u201callowing clear and certain access to the financial system for state-legal cannabis businesses does not amount to the federal legalization of cannabis.\u201d<\/p>\n \u201cLegislation like the SAFER Banking Act enhances and strengthens regulatory oversight and allows financial institutions to rightfully serve businesses in their communities without unnecessary fear or uncertainty,\u201d he said.<\/p>\n The\u00a0hearing<\/a> took place about two weeks after a GOP member of the House Financial Services Committee, Rep. Warren Davidson (R-OH), raised the cannabis banking issue with Comptroller Jonathan Gould<\/a>\u00a0at a meeting of that panel.<\/p>\n Despite the increased attention to the issue, the prospects of advancing something like the SAFER Banking Act in the near future seem doubtful. Multiple key House and Senate lawmakers told Marijuana Moment last month that the issue has taken a back seat to other legislative priorities<\/a>.<\/p>\n Sen. Bernie Moreno (R-OH), who is expected the carry the marijuana banking measure in his chamber this Congress, previously said that\u00a0he imagined the bill would come up over the fall<\/a>. Those comments came before a historically long government shutdown, however, and the bill has not yet been filed in either chamber for the current session.<\/p>\n Sen. Jeff Merkley (D-OR), who has sponsored the legislation in prior sessions, told Marijuana Moment that the banking issue is among those Congress has put \u201con the back burner,\u201d with Democrats focused on other priorities such as preserving health care subsidies under the Affordable Care Act.<\/p>\n On the House side, Rep. Lou Correa (D-CA) said \u201cit feels like I\u2019ve heard nothing\u201d about the path forward for SAFE Banking, and he feels \u201cby now we should\u2019ve had some buzz on it.\u201d<\/p>\n The House has passed versions of the legislation seven times over recent sessions. It advanced out of committee in the Senate last Congress, but it was not taken up on the floor.<\/p>\n One of the most proactive anti-cannabis lawmakers on Capitol Hill, Rep. Andy Harris (R-MD), told Marijuana Moment that he\u2019s not sure about the status of the banking bill but he remains of the mind that, \u201cif it\u2019s illegal at the federal level, it should be kept out of the banking system.\u201d<\/p>\n \u201cBut it\u2019s the will of the chamber. My position hasn\u2019t changed,\u201d he said. \u201cI don\u2019t hear that [the bill is moving], but it\u2019s been tried before. It may succeed this year. I don\u2019t know.\u201d<\/p>\n The comments from the bipartisan and bicameral lawmakers came about a month after bipartisan senators said\u00a0they remain eager to advance the marijuana banking measure<\/a>\u2014though there was disagreement about whether a possible decision from Trump to reschedule cannabis would open the door to passing additional reforms in Congress.<\/p>\n Sen. Steve Daines (R-MT), who\u2019s been the lead GOP sponsor of that banking measure in past sessions, said he\u2019s \u201cnot sure absolutely\u201d whether moving marijuana from Schedule I to Schedule III of the Controlled Substances Act (CSA) would meaningfully affect how his colleagues approach the financial services legislation. He said \u201cmany senators hold strong opinions,\u201d and \u201cthey keep those opinions separate from SAFE Banking.\u201d<\/p>\n Unlike Daines, Sen. Ron Wyden (D-OR) said rescheduling would send a \u201chuge message\u201d to his colleagues about the need to \u201cfinally come up with a modern approach\u201d to marijuana laws.<\/p>\n Moreno, for his part, said he did feel that Trump advancing rescheduling would be\u00a0an \u201cimportant domino\u201d to advance the bipartisan cannabis banking legislation<\/a>.<\/p>\n The upcoming House committee hearing comes months after\u00a0senators on both sides of the aisle addressed the lack of banking access for the marijuana industry<\/a>\u00a0at a separate hearing in February, with one GOP member suggesting that the issue warrants a broader examination of federal cannabis policies.<\/p>\n \u2014 Meanwhile, during a House Appropriations Committee markup in September, Rep. Betty McCollum (D-MN) criticized the exclusion of provisions to\u00a0protect banks that work with state-licensed marijuana and hemp businesses<\/a>\u00a0from a key spending bill.<\/p>\n Relatedly, a bipartisan coalition of 32 state and territory attorneys general from across the U.S. recently called on Congress to\u00a0pass a marijuana banking bill to free up financial services access for licensed cannabis businesses<\/a>.<\/p>\n In January, the office of Rep. Dave Joyce (R-OH), who is again leading the effort on the House, told Marijuana Moment that he would be filing the\u00a0cannabis banking legislation this session but that its introduction was \u201cnot imminent\u201d<\/a>\u00a0as some earlier reports had suggested.<\/p>\n The post Bipartisan Senators Discuss Marijuana Industry Banking Issues As Trump \u2018Strongly\u2019 Considers Rescheduling<\/a> appeared first on Marijuana Moment<\/a>.<\/p>\n
As President Donald Trump affirms that his administration is \u201cvery strongly\u201d considering a proposal to reschedule marijuana, bipartisan senators raised the issue during a hearing with a former state cannabis regulator who testified about the unique challenges federal prohibition imposes on state regulators. While attention within the cannabis community isContinue Reading<\/a><\/span><\/p>\n","protected":false},"author":458,"featured_media":84844,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[18,81],"tags":[],"_links":{"self":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/84843"}],"collection":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/users\/458"}],"replies":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/comments?post=84843"}],"version-history":[{"count":1,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/84843\/revisions"}],"predecessor-version":[{"id":84845,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/84843\/revisions\/84845"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/media\/84844"}],"wp:attachment":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/media?parent=84843"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/categories?post=84843"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/tags?post=84843"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\nRead More: Bipartisan Senators Discuss Marijuana Industry Banking Issues As Trump \u2018Strongly\u2019 Considers Rescheduling<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"