With Banking a Sticking Point, Cannabis Group Boosts Lobbying Game
The National Cannabis Industry Association is working with lobbying firms on both sides of the aisle in an effort to push for legislation that would make it easier for legal marijuana businesses to use banking services. The move comes as a credit union runs into issues with the Federal Reserve.
The inconsistencies between state-level marijuana legalization and federal-level banking regulations still linger nearly two years after Colorado pot shops legally opened for business.
But the industry’s leading trade group has its eye on fixing those issues. The National Cannabis Industry Association (NCIA) plans to start using some of its clout to lobby for changes in the the country’s financial system.
The organization is hoping to find appeal for its message among both Democratic and Republican lawmakers and, to that end, has hired the services of two major lobbying firms: the Democratic-leaning Heather Podesta + Partners and the Republican-focused Jochum Shore & Trossevin.
NCIA’s executive director, Aaron Smith, noted to The Wall Street Journal that this is another sign of the organization’s growing legitimacy.
“We’ve gone from simply seeking to have our industry’s issues taken seriously to bipartisan legislation introduced in both chambers,” he said.
Pot’s Money Problems
The fresh lobbying push comes at a time when pot businesses have found federal banking regulations difficult to overcome. The Oregon Bankers Association, for example, noted that although the Treasury Department has created a path for banks to offer services to marijuana businesses, the high level of compliance makes the strategy unattractive for bankers.
“Frankly they just bring to light the regulatory scrutiny that banks are under when they’re serving these businesses,” OBA President and CEO Linda Navarro told Northwest Public Radio. “It’s much higher, and the compliance burden is much more challenging.”
But perhaps the most telling sign of the challenges around banking for marijuana-related businesses comes from Colorado, the first state to allow the legal sale of cannabis. Fourth Corner, a credit union specifically targeting marijuana businesses, had its application rejected by the Federal Reserve last month. The credit union, which had been approved at the state level last year, is now filing lawsuits in federal court to fight the banking regulator’s decision.
“I felt all along like they were trying to figure out a way to deny our application,” said Mark Mason, a lawyer who is working with the credit union, in comments to The New York Times.
Fourth Corner has some prominent supporters both among trade groups and the state’s government.
“We thought it was a good model. It’s an under-banked industry, and that’s a problem not just for them but for the people of Colorado,” noted Andrew Freedman, an adviser to Gov. John Hickenlooper, in comments to The Associated Press.