US Industry Regulators and Cannabis

Goals

To understand how US regulators look upon cannabis involvement in the following sectors: financial services, transportation, gambling, alcohol licensing, healthcare and mobile telecoms.

Early Findings

FINANCE

  • According to the American Banking Association (ABA), financial institutions have to be careful about their dealings with companies or ventures that involve marijuana, since "the possession, distribution or sale of marijuana remains illegal under federal law."
  • The ABA is calling upon Congress and regulatory agencies to "provide greater legal clarity to banks operating in states where marijuana has been legalized for medical or adult use."
  • If a financial institution provides products or services to a marijuana-related business, they may be in violation of "the Controlled Substances Act (CSA), 21 U.S.C. § 841," and they may be liable under money laundering laws if they engage in transactions that involve proceeds from marijuana sales.
  • A congressional spending bill would offer protections for banks serving legal marijuana businesses.
  • The House Financial Services Committee advanced the Secure And Fair Enforcement (SAFE) Banking Act, which would provide protection for financial institutions that "serve state-authorized marijuana and ancillary businesses."
  • US state and territory regulators are pressing Congress to "to pass legislation allowing marijuana businesses to store their profits in banks."
  • California is considering legislation (SB 51) that would allow charter banks and credit unions "to be licensed as “cannabis depository institutions”, or “CDIs”, to bank California cannabis money."
  • The Fourth Corner Credit Union in Denver offers a case study regarding a financial institution's efforts to gain regulatory approval to bank marijuana money.

TRANSPORTATION

  • Truckers face a dilemma when transporting equipment or supplies to marijuana-growing facilities in states where it is legalized because federal law still says marijuana is illegal.
  • The Cole Memo appears to offer some protections for the transportation industry, as it shifts the legal focus away from prosecuting marijuana activity in states where it is legalized.
  • In California, where marijuana use is legal, companies that transport marijuana are still required to register their vehicles with the Department of Transportation, including stating what the vehicle will be used for. So even in states where cannabis is legal, regulators may not yet offer the protections transportation companies need to do business, either directly or indirectly, within the marijuana industry.
  • While individual state regulators may vary on the rules governing the transportation of marijuana, federal regulations apply when a company is transporting marijuana across state lines, and federal law still says that marijuana use or distribution is illegal, trumping many state laws.
  • Transportation industry drivers in states where marijuana use is legal may be under closer scrutiny regarding their own use of cannabis products to ensure safe driving.

Proposed next steps:

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As the initial research provides a brief overview of how US regulators look upon cannabis involvement in the financial and transportation sectors, we would recommend additional research to evaluate each industry, individually: financial services, transportation, gambling, alcohol licensing, healthcare, and mobile telecoms.
In addition, we would recommend research to uncover 2-3 case studies of companies in each of the six identified industries (financial services, transportation, gambling, alcohol licensing, healthcare, and mobile telecoms) that have dealt with regulatory obstacles related to cannabis-related ventures.