Discrepancies between state and federal laws are hindering growth
Conflicting laws on the state and federal levels are suppressing the marijuana industry. More lawmakers and political figures are growing impatient at what they view as delays in the legislative process and are pressing the federal government to take action. The head of the U.S. Federal Reserve, Jerome Powell, is one of these and recently stated his opinion during a hearing by the Senate Finance Committee.
Senator Bob Menendez broached the subject, stating to Powell, “My home state of New Jersey is moving towards legalization of recreational marijuana, and I have concerns that these new businesses, as well as the existing medical marijuana businesses in the state, will continue to find themselves shut out of the banking system. And when these businesses are forced to operate exclusively in cash, they create serious public safety risks in our communities. Do you agree that financial institutions need clarity on this issue?”
Powell, who took over the Fed in February of last year, replied, “I think it would be great to have clarity. Financial institutions and their regulators and supervisors are in a very difficult position here with marijuana being illegal under federal law and legal under a growing number of state laws. It puts financial institutions in a very difficult place. It puts supervisors in a difficult place, too. It would be nice to have clarity on that supervisory relationship.”
It isn’t just that it “would be nice;” clarification is needed and is long overdue. Congress has had more than enough time to react and 2019 is the year that marijuana legislation, including banking governance, needs to be made a priority.