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Senators introduce bill to make banking easier for marijuana businesses

Conflicts between federal, state laws hamper growers, retailers

Photo (c) Peter Kim - Fotolia
Marijuana is now legal to at least some extent in 44 states but that's not much consolation to the farmers and merchants who grow and sell the stuff. They're hamstrung by federal regulations that block banks from serving businesses that are engaged in illegal activity -- and since the feds still regard marijuana as illegal, that includes all the pot growers and sellers.

A bipartisan group of senators are trying to change that, introducing legislation that would block federal banking regulators from putting pressure on banks to deny service to marijuana-based businesses. The senators, who include Republican Rand Paul and Democrat Cory Booker, have made similar efforts in previous sessions.

A similar bill is pending in the House. The Ending Federal Marijuana Prohibition Act, sponsored by Rep. Thomas Garrett (R-Va.), would lift the nation’s pot restrictions and allow states to decide how to regulate medical and recreational marijuana.

Stuck in the middle

The Obama Justice Department was somewhat lenient in its enforcement of the existing rules but the Trump Administration is downright hostile. Attorney General Jefferson Bureaugard Sessions last week ordered prosecutors to crack down on all drug-related crimes.

The turmoil leaves marijuana businesses stuck in the middle. Unable to accept credit cards or open bank accounts, they are forced to deal solely in cash. Some disguise the nature of their business, opening them to prosecution for fraud.

The insurance industry has also backed away from marijuana. In 2015, Lloyd’s of London stopped insuring marijuana industry firms of any kind due to conflicts between federal and state laws over their legality, Insurance Journal reports.

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