OREGON BILL WOULD CREATE BANKING ALTERNATIVE FOR CANNABIS INDUSTRY, BYPASS FEDERAL RESERVE | WHAT REALLY HAPPENED


OREGON BILL WOULD CREATE BANKING ALTERNATIVE FOR CANNABIS INDUSTRY, BYPASS FEDERAL RESERVE

A bill filed in the Oregon House would establish limited state-chartered banks to serve the cannabis industry. Final passage of this legislation would remove a major federal roadblock in front of the developing industry in the state and further nullify federal prohibition in practice.

Rep. Pam Marsh (D) and Rep. Ken Helm (D) introduced House Bill 3169 (HB3169) on Feb. 28. The legislation would create a self-contained, state chartered banking system for the cannabis industry in Oregon.

Because marijuana remains illegal under federal law, cannabis businesses in states that have legalized marijuana remain effectively locked out of the banking system. If a federally chartered or insured financial institution touches marijuana money, it takes on significant legal risk. The federal government insures or charters virtually every bank in the U.S. As a result, cannabis businesses have been forced to transact almost exclusively in cash. Passage of HB3169 would bypass the federal banking system and create a limited banking alternative for the marijuana industry in Oregon.

HB3619 would authorize banking institutions and credit unions to organize as limited charter cannabis financial institutions. Cannabis businesses would be able to deposit funds in these institutions and write “special purpose checks” for the following:

(a) To pay fees or taxes to a public body;
(b) To pay rent on property that is leased by, or on behalf of, a cannabis business;
(c) To pay a vendor that is physically located in Oregon for goods or services associated with a cannabis business; and
(d) To purchase bonds issued by a public body.

Webmaster's Commentary: 

I think that Oregon is doing the right thing here; it will be interesting to see how this bill progresses in its Legislature.

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