CU, Bank Leaders Pen Joint Cannabis Article Posted by AVCU on 11:24 AM

Jim Nussle, CUNA (left), Rob Nichols, ABA (right)

In a move not often seen between rival industries, the leaders of CUNA and the American Bankers Association penned a Fox Business News opinion article urging Congress to fix the conflict for credit unions and banks with providing financial services to the cannabis industry. Their message wasn't focused on the legalization debate. Instead, they urge solving the pressing and practical concern of what to do with the money when state law says cannabis is legal but federal law says its not.

CUNA president Jim Nussle, and ABA president Rob Nichols penned that in the 33 states, territories and the District of Columbia where cannabis has been legalized, credit unions and banks are prevented from providing financial services to cannabis-related businesses because cannabis is illegal under federal law and, as a result, handling proceeds from a transaction involving it is considered money laundering. Not only does this leave cannabis businesses operating almost entirely in cash, but it has the added effect of criminalizing the vendors, suppliers and utility companies that serve those businesses.

Cannabis business owners therefore have a lot of cash stored in backroom safes, transported in backpacks and used for payroll every Friday. That much cash paints a target on storefronts and employees for would-be thieves. A 2015 study found one in every two cannabis dispensaries were robbed or burglarized, with the average thief walking away with $20,000 to $50,000.

Nussle and Nichols point to "The Secure and Fair Enforcement (SAFE) Banking Act" introduced in Congress earlier this year as a solution to ensure that the states and territories that have legalized cannabis can keep their communities safe, collect taxes and regulate markets effectively while Congress grapples with the broader questions about national drug policy. The legislation would protect credit unions and banks that offer products and services to state-legal cannabis businesses and provide assurance and legal clarity while removing vulnerabilities throughout the system. Attorneys general from 38 states, including Vermont AG TJ Donovan, also called on Congress to pass this important legislation.

Read the joint opinion article in its entirety