(The Center Square) – Delaware lawmakers are advancing a plan that would shield from prosecution by federal authorities the banks, lenders and other financial institutions that do business with the state’s budding recreational cannabis industry.
The proposal, which recently cleared the House Economic Development, Banking, Insurance and Commerce Committee, would provide state-level legal protections for financial services providers that want to provide services to licensed marijuana businesses without facing criminal liability.
Backers of the measure say it would authorize secure transactions that will allow state-licensed marijuana businesses to use traditional banking methods and eliminate the dangers associated with managing large amounts of cash.
They say it would reduce the risk of theft, robbery and violence associated with cash-intensive business.
“We want Delaware’s safe and regulated industry to out-compete the black market,” state Rep. Ed Osienski said in a statement. “By providing dispensaries with a secure avenue to banking and compliance services, we empower them to contribute positively to our economy, keep costs down for the industry and customers, employ local talent, and fulfill their tax obligations.”
He said uncertainty about financial and accounting services for cannabis businesses “not only undermines the operations of state-compliant dispensaries but also hinders their access to basic business functions such as access to banking, acquiring loans, or paying taxes.”
Sen. Trey Paradee, the Senate’s lead sponsor of the bill, said with an over-reliance on cash-transactions, cannabis retailers are “at a disadvantage” in terms of their banking, compliance, and safety needs.
“At the end of the day, cannabis retailers in Delaware are small businesses,” he said. “They serve our communities. They will hire Delawareans. They will pay their taxes. They will contribute to the economic development of this state.
The legislation is backed by state Treasurer Colleen Davis, who says it would provide “state-level legal protection, and a clear legal framework for banks, payment processors, and other financial service providers to follow.”
“Banks and credit unions are hesitant to serve the marijuana industry because of concerns regarding federal prosecution or penalties since marijuana remains illegal under federal law,” she said in a statement.
Delaware legalized recreational pot last year under a pair of bills that Democratic Gov. Jay Carney allowed to become law without his signature.
The state is finalizing regulations for the new industry and is expected to begin accepting applications for state licenses this year, according to regulators. Retail sales are expected to get underway sometime next year.
But the drug remains illegal under federal law, and the nation’s credit card companies and banking system have been reluctant to authorize transactions involving cannabis sales, even in states where it is legal.
To date, at least 24 states, the District of Columbia and the U.S. territory of Guam have legalized recreational marijuana, according to the National Conference of State Legislatures. Forty states have medical marijuana programs.
