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Senate Committee Votes to Allow Marijuana Banking

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A key U.S. Senate panel voted on Thursday to allow state-legal marijuana providers to do business with banks.

By a vote of 16 – 14, the Senate Appropriations Committee approved an amendment that would prohibit the federal government from spending money to “penalize a financial institution solely because the institution provides financial services” to marijuana businesses that operate legally under state law.

Out of fear of violating current money laundering and drug laws, many banks are reluctant to do business with marijuana providers.

“That results in a huge cash economy that is an invitation to crime and malfeasance,” amendment sponsor Sen. Jeff Merkely (D-OR) said in the short debate preceding the vote. “It’s an invitation to money laundering. It is an invitation to theft.”

All of the committee’s Democrats voted in favor of the measure, except for Sen. Dianne Feinstein (CA). And all of the committee’s Republicans voted against it, except for Sens. Lisa Murkowski (AK), Bill Cassidy (LA) and Steve Daines (MT).

Marijuana law reform advocates praised the vote. “Marijuana businesses in Colorado alone are on pace for nearly $ 1 billion dollars in revenue this year. Forcing these companies to store that much cash anywhere other than inside banks raises significant public safety concerns,” Dan Riffle, director of federal policies for the Marijuana Policy Project, said in a press release. “Current federal laws are putting a bullseye on businesses that are operating legally under state laws, as well as their employees and customers. It’s almost as if some federal officials want to see marijuana businesses get robbed.”

The overall legislation that the amendment is now attached to — the 2016 Financial Services and General Government Appropriations bill — also contains other good news news for reformers. Unlike the version that is moving forward in the House, the Senate legislation does not include language seeking to prevent Washington, D.C. from spending money to tax and regulate the sale of marijuana.

The Fiscal Year 2016 budget that the White House submitted to Congress earlier this year also does not contain the D.C. prohibition. Ultimately, the final language enacted into law will be the result of compromise negotiations between the two legislative chambers and the administration.

This is the fourth cannabis reform amendment approved by the Senate Appropriations Committee this year. Previously, the panel voted to allow greater access to medical cannabis for military veterans, to stop federal intervention in state industrial hemp research programs and to prohibit the Justice Department from interfering with the implementation of state medical marijuana laws. The latter two of those amendments were also approved by the full House of Representatives.

“The stage has been set to end the federal government’s failed war on marijuana,” Michael Collins, policy manager at the Drug Policy Alliance, said in a press release. “A bi-partisan consensus has emerged in favor of reform.”

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