As the tentacles of the federal policy of cannabis prohibition run deep into nearly every sector of American public policy, a new voice emerged to call for clarity regarding state-legal cannabis marketplaces: Federal Reserve Chair Jerome Powell.
Currently, almost none of the businesses operating in the cannabis space can legally obtain a bank account, process a credit card, or take a standard business deduction on their federal taxes. This is because federal law continues to inappropriately define all marijuana-related endeavors as criminal enterprises, including those commercial activities that are licensed and legally regulated under state laws.
“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,” said Senator Bob Menendez (D-NJ) at the semiannual monetary policy hearing. “And when these businesses are forced to operate exclusively in cash, they create serious public safety concerns.”
To which, Federal Reserve Chairman Powell replied, “I think it would be great to have clarity. It puts financial institutions in a very difficult place and puts the supervisors in a difficult place, too. It would be nice to have clarity on that supervisory relationship.”
Clarity can mean a lot of things, but what should be the cornerstone of any major marijuana reform is a removal of cannabis itself from the Controlled Substances Act.
By removing marijuana from the CSA, the roadblocks to banking access, capital, and other issues associated with the nascent industry would be eliminated. Not to mention it would mark the end of the failed and shameful criminalization of cannabis possession by otherwise law-abiding adults.
Ultimately, Congress must amend federal policy so that these growing numbers of state-compliant businesses, and those millions of Americans who patronize them, are no longer subject to policies that needlessly place them in harm’s way. Cannabis businesses ought to be held to the same standards as other commercial enterprises.
Earlier this month, NORML submitted testimony to this effect in a House Financial Services Committee hearing, which you can read HERE.
You can watch the exchange below.