Banks want a hit of the marijuana business

The U.S. banking industry has a marijuana problem.

Cannabis is legal in more than two dozen states in some form. But it is still illegal on a federal level, leaving most risk-averse banks too scared to do business with legal marijuana businesses for fear of angering their regulators.

The banking industry, having spotted a potentially lucrative untapped market, has pushed lawmakers for years to tackle the issue to no avail. They may finally be getting somewhere.

On Wednesday, the House held its first hearing on the topic, an event considered so momentous that several banking groups sent out news releases and held conference calls. “Today’s hearing is a big deal,” said Rep. Ed Perlmutter, D-Colo., who has been pushing legislation to address the issue for years.

The House Financial Services subcommittee took up proposed legislation, the Secure and Fair Enforcement Banking Act of 2019 or SAFE Banking Act, that would protect banks and their employees from punishment for providing services to cannabis businesses that are legal on a state level.

Some small banks have offered accounts to marijuana businesses, but acknowledge that it creates new regulatory burdens.

Without a bank account, legal marijuana businesses must operate on a cash basis, making them targets for robberies, supporters of the legislation testified. In California, cannabis dispensaries have dropped off duffel bags and suitcases full of cash to pay their taxes, Fiona Ma, the state’s treasurer, told the committee.

The proposed legislation’s prospects are unclear.