Treasury Secretary Steven Mnuchin. File photo
While U.S. Attorney General Jeff Sessions is making it harder to bank marijuana deposits, U.S. Treasury Secretary Steven Mnuchin appears much more receptive to the idea.
“I assure you that we don’t want bags of cash,” he said Tuesday during an appearance before the House Financial Services Committee, according to Forbes. “We want to make sure that we can collect our necessary taxes and other things.”
Mnuchin added that the Treasury Department is currently assessing how to deal with the situation regarding banks and marijuana deposits.
The issue has always been a
murky one for banks; while medical and recreational marijuana is legal in many states, it is still illegal on the federal level. Federally-insured lenders typically have a clause in their mortgages noting that owners cannot conduct an illegal activity.
Despite the legal gray area, however, banks in Massachusetts have been showing interest in the potentially $1 billion industry. Century Bank is banking marijuana deposits and a marijuana investor told a group of private equity firms and venture capitalists last year that there were currently
three state-chartered banks working with marijuana businesses.
Sessions caused significant confusion when he recently rescinded the Cole Memo, an Obama administration guidance that essentially said the federal government would not interfere with marijuana programs in states in which they are legal. But as Banker & Tradesman
reported in January, experts believe this would not dramatically change banks’ approach to marijuana deposits.
“We believe and are optimistic that the DOJ’s ‘reversal’ will not have a significant impact upon the present course of the cannabis industry in Massachusetts,” said Frank Segall, co-chair with Scott Moskol of the Cannabis Advisory Group at the Boston-based law firm Burns & Levinson.
That’s because the Cole Memo was not a law, but a direction to try to provide some clarity at that time, Moskol said.
“Presently, the federal government remains barred from using federal funds to prosecute properly licensed, compliant medical marijuana facilities as a result of the bipartisan Rohrabacher-Blumenauer Amendment; such protections are silent as to adult-use marijuana,” he said.
This amendment is still in place, although last week, treasury officials said they were reviewing it in response to the move by Sessions to rescind the Cole Memo.
Rep. Brad Sherman (D-CA) told Mnuchin at the hearing that simply deleting the banking memo “would really make it better for armed robbers in my community, because there’d be huge amounts of cash at the local marijuana dispensary.”
“I did not participate in the attorney general’s decision and what he did, but we are consulting with them now,” Mnuchin said at the hearing. “We do want to find a solution to make sure that businesses that have large access to cash have a way to get them into a depository institution for it to be safe.”
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