Rep. Mark Amodei has signed on to support legislation that would shield from federal penalties banks that serve the marijuana industry in states such as Nevada where it is legal. He is the last member of the Nevada delegation to back the bill.
“It’s not my cup of tea, but that train has left the station,” Amodei said of marijuana in Nevada, which legalized the plant for recreational use in 2017.
But Amodei said he wants to go further than merely opening up the banking system to the marijuana industry. He also wants the industry to be treated like alcohol, tobacco and gaming, which are licensed and subject to more scrutiny than other businesses — and pay federal taxes.
“That’s a privileged business license,” Amodei said, adding “even though I’m a Republican, everybody else has their cut of the action, there ought to be a federal cut.”
He said he may seek to add the language as an amendment if it is not in the bill in future iterations that reach the House floor. He also believes that state, local and federal authorities ought to have unfettered access to the financial accounts of marijuana purveyors so that they can be tracked, if needed for purposes of regulation and law enforcement.
“We all agree that money laundering is a bad thing and that bad people try to do it,” he continued.
The marijuana industry is currently a cash-based business as a result of having little-to-no access to the banking system.
“They shouldn’t be dealing with a whole bunch of cash floating around, like they are now,” Amodei said.
He said the banking regulations can make it difficult for anyone, including plumbers or carpenters, who do business with marijuana-affiliated businesses. “This bit where they try to squeeze people who are honestly in the trades…is just ridiculous,” he said.
He also mused about the irony that states are happy to collect marijuana tax revenue, typically paid in cash, but that it is only the marijuana industry that is also under scrutiny for money laundering.
“It’s OK if banks launder pot money for governments, they just can’t do it for the private sector,” he said.
Because marijuana falls under the jurisdiction of the federal Controlled Substances Act, it’s against the law for anyone — including banks — to handle the proceeds from marijuana businesses.
The disconnect between the federal law and states where it has been legalized makes it difficult for banks to operate within the marijuana industry. One example of a law on the books is the Bank Secrecy Act, an anti-money laundering law under which financial institutions must tell the federal government about any suspected illegal activity — a category that would include transactions related to marijuana businesses, even if they are legal under state law. The law requires reports if someone makes a cash payment of $10,000 or more from a single buyer.
Rep. Ed Perlmutter of Colorado, who is among the lead sponsors of the bill and welcomed the support of the Nevada delegation, is optimistic the measure can clear the House because Democrats won the House majority in the 2018 midterm elections, and most states have legalized marijuana to various degrees.
“We’ve got a lot better chances than we’ve ever had before, in part, because Democrats took the House and I think the fact that we are at 47 states that have some level of marijuana use,” Perlmutter said. “Prohibition is over. We need to get the cash off the streets.”
A member of the Financial Services Committee, Perlmutter believes the panel will hold a hearing on the bill before it gets to the House floor.
Updated at 8:43 a.m. to correct Ed Perlmutter’s fist name.