We received the following perspective from Josh Herndon, an attorney at Global Legal Law Firm:
Marijuana is currently listed as a federally controlled substance in the Controlled Substances Act (CSA). That, in turn, has negatively impacted marijuana businesses, which have been forced to conduct business almost entirely in cash. That is because banks (which are federally regulated) have been reluctant to provide services to marijuana businesses for fear that federal authorities might punish them for violating money-laundering laws, as well as other federal statutes and regulations. That, in turn, has prevented marijuana businesses from opening and maintaining bank accounts, obtaining capital investments and loans, and accepting debit and credit cards.
However, the Strengthening the Tenth Amendment Through Entrusting States (STATES) Act would amend the CSA and remove marijuana from the schedule of drugs that are illegal in states that have legalized recreational and/or medicinal marijuana, such as California and Colorado. In essence, the act would end the federal prohibition of marijuana in states where recreational and/or medicinal marijuana is legal.
If the STATES Act passes, it will be enormously beneficial to marijuana businesses because banks and financial institutions in states that have legalized recreational and/or medicinal marijuana will be free to work with and offer services to any cannabis business that complies with the laws of those states.
Although the status of the STATES Act is uncertain, President Trump has indicated he supports the rights of states to legalize marijuana, even though such rights are opposed by elected officials in his own party. Interestingly, the act has exposed a rift between Republican elected officials who oppose legalization and growing numbers of rank-and-file Republicans who favor federal protections such as the STATES Act for their states' marijuana businesses. Stay tuned for future developments concerning this act.
We appreciate Josh Herndon for sending in this note on pending legislation that could dramatically affect the payments industry's ability to process payments for cannabis-related businesses. Why not send in your opinions, too? Please send up to 300 words for this page to firstname.lastname@example.org.
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