Cannabis News of Note for the Week:
Politico Pro Cannabis: Interstate Commerce May Pose Banking Complications (paywalled newsletter, full text below)
Cannabis Reports of Note for the Week:
Politico Pro Cannabis: INTERSTATE COMMERCE MAY POSE BANKING COMPLICATIONS — Due to federal illegality, a lot of policy possibilities in cannabis are still purely theoretical — and one of the potential problems looming before the industry is interstate commerce.
Several West Coast state legislatures have already passed or are considering bills that would allow state governments to enter into interstate compacts with other legal cannabis states for interstate commerce. Many of those have clauses that require permission from the federal government for commerce to commence.
If interstate cannabis commerce began while federal prohibition remained in place, some experts believe it could pose complications for banking services.
Peter Su, a senior vice president at Green Check Verified — a consulting and technology company serving the cannabis industry —explains that FinCEN guidance is based on the Cole Memo. The Cole memo, which was issued in 2013 and then repealed by the Trump administration in 2018, had language that ensured cannabis wouldn’t cross state lines.
Su points out that current FinCEN guidance says banks would need to flag if any interstate commerce occurs — but does not say if those banks need to shut down bank accounts because of that, or if they just need to keep track of it occurring.
“I do think certain banks will say, ‘Well, no, we can’t have you doing that,’” Su said. “In lieu of further guidance, I can see it as being very disruptive.”
Su adds, though, that there will also be banks that will be willing to test the limits of the FinCEN guidance and see if they will be penalized for serving companies that participate in interstate commerce. While the banking sector works through that, cannabis businesses may be forced to choose between shipping their products out of state and having banking services.
“It’s a weird catch-22,” he said.