As our regular readers are aware, Senators Warren and Gardner introduced a bi-partisan bill in the Senate for the federal government: (1) to generally defer to state laws legalizing marijuana and (2) to effectively allow all banks to provide services to legal cannabis businesses in the same way that they treat other legal businesses (STATES Act, S. 3032). S. 3032 has been read twice and was referred to the Senate’s Judiciary Committee when it was introduced on June 7. An identical bill was introduced in the House (H.R. 6043), also on June 7, and was referred to the House’s Judiciary and Energy and Commerce Committees on the same day. No action has been taken on either bill since they were introduced.

Earlier this month, Congress continued to avoid providing bank access to state-legal cannabis businesses by voting against measures in appropriations bills that would have prohibited bank regulators from using federal funds to punish banks that provide bank services to state-legal cannabis businesses. This failure by Congress to allow cannabis business access to the banking system continues to cause serious business and safety problems for state-legal cannabis businesses.

With the midterm elections now coming into clear view, and with dramatic divisions in both houses of Congress, it appears unlikely — at the present time — that Congress will take any steps to solve this cannabis banking problem. It also remains unclear if, without Congressional action, the federal banking regulators will take any useful steps in the area, especially in light of the rescission of the Cole memo by Attorney General Sessions.

We will continue to follow and report on this, but unless an imaginative and scalable solution is found, the risks (including to public safety) and difficulties in dealing in an all-cash business is likely to be a significant hurdle for state-licensed  cannabis businesses.

Photo of Barry A. Abbott Barry A. Abbott

Barry Abbott represents established corporations and startups in all aspects of their corporate, financial services, internet, payments and e-commerce businesses. He is nationally recognized for his work advising clients on developing ground-breaking consumer financial services products.

Barry Abbott is a pioneer in e-commerce lending matters. National and international financial institutions look to him for counsel on major transactions. He also advises startups (including crowdfunding, peer-to-peer and gaming companies) on corporate and regulatory matters. Notably, Barry was:

  • Involved in developing the legal documents for the first equity line product (for Crocker Bank in the late 1970s)
  • Principally responsible for developing all legal documents for the first major reverse mortgage program (for Transamerica HomeFirst in the late 1980s)
  • Original legal counsel responsible for organizing the National Council of Real Estate Investment Fiduciaries (NCREIF)
  • General Counsel to the REX Group, which developed the first true home owner-occupied option investment product and marketplace
Photo of Angélica María González Angélica María González

Angélica is a Summer Associate at Lane Powell and is currently pursuing her J.D. at Seattle University School of Law. She received her B.A., with honors in Politics and Values, from the University of Washington. Last summer, Angélica was selected as one of 19 students nationwide to participate in the Intellectual Property Law Institute (IPLI) sponsored by the Hispanic National Bar Association and Microsoft. IPLI is an immersive program that combines practical experience and substantive instruction from IP professionals and the U.S. Court of Appeals for the Federal Circuit, U.S. Patent and Trademark Office, Copyright Office, Federal Trade Commission, U.S. International Trade Commission and U.S. Senate and House Judiciary Committees. She is actively involved in community and public advocacy initiatives, including serving as a Legislative Partner for the City of Seattle’s Mom’s Rising (Childcare for Graduate Students) program; Policy Council Representative for Puget Sound Education Service District; Parent Ambassador to the Washington State Association of Head Start; and more! Angélica was the 2018 recipient of King County Bar Association’s minority law student scholarship.