The chairman of the Federal Reserve acknowledged the dilemma faced by legal cannabis enterprises that can’t get checking accounts or accept credit cards because most banks can’t do business with them as long as the drug is illegal on the federal level.
“It puts financial institutions in a very difficult place,” Jerome Powell told the Senate Banking Committee Tuesday. “It would be nice to have clarity on that.”
Because banks are federally regulated, any efforts to do business with cannabis companies would run afoul of the federal ban on marijuana. Banks that work with such companies could be charged with money laundering.
Powell was responding to a question from U.S. Sen. Robert Menendez, D-N.J., whose state is moving toward legalizing cannabis for personal use. A bill could be finished as early as next week.
“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,” Menendez said. “And when these businesses are forced to operate exclusively in cash, they create serious public safety concerns.”