The governor of Pennsylvania signed a bill into law that contains provisions to shield banks and cannabis insurers from state interference for working with licensed medical cannabis businesses.
The new legislation is the same as a standalone bill that had previously cleared the Senate before receiving approval in a key House committee. However, the measure’s chief sponsor, Sen. John DiSanto, then decided to file it as an amendment to HB 311, which provides authorization to some financial institutions to carry out savings promotion programs.
Gov. Tom Wolf (D) signed HB 311 into law after it landed on his desk.
The governor and the legislature’s move is the latest sign of a growing trend among state lawmakers to take action on marijuana banking and insurance reform, as politicians on Capitol Hill continue to stall on a solution for state-legal cannabusinesses.
Pennsylvania’s marijuana banking and insurance amendment will not guarantee protection to financial institutions from federal action for servicing cannabusinesses. It does, however, signal to Pennsylvania’s finance industry that state agencies will not take action against them for working with marijuana businesses.
The approved amendment reads that a “financial institution authorized to engage in business in this Commonwealth may provide financial services to or for the benefit of a legitimate cannabis-related business and the business associates of a legitimate cannabis-related business.”
These protections will also apply to insurers.
The amendment, however, also makes clear that financial institutions are in no way compelled to work with medical cannabis businesses.
The amendment goes on to say that the state cannot “prohibit, penalize or otherwise discourage a financial institution or insurer from providing financial or insurance services to a legitimate cannabis-related business or the business associates of a legitimate cannabis-related business.”
Nor can state agencies “recommend, incentivize or encourage a financial institution or insurer” to withhold its services from a medical marijuana business.
Furthermore, state agencies are prohibited from taking “adverse or corrective supervisory action on a loan made to a legitimate cannabis-related business.”
Marijuana reform advocates hope that protections at the state-level for financial institutions will increase the urgency for congressional lawmakers to take action at the federal level. State-legal marijuana businesses across the country are currently hampered by limited access to financial services and find themselves at an increased risk of crime as a result of having cash on-site.
The Secure and Fair Enforcement (SAFE) Banking Act, which would afford such federal-level protections, has been passed by the House of Representatives on six occasions in one form or another, but its progress in the Senate has stalled, most recently due to Majority Leader Chuck Schumer’s insistence on prioritizing comprehensive federal marijuana reform.
House lawmakers have now moved to include provisions of the SAFE Banking Act in a large-scale defense spending bill, but its fate in the Senate remains uncertain.
Partly in response to this impasse, bipartisan lawmakers introduced a new marijuana finance bill which, on top of affording protection to financial institutions from federal interference, would allow marijuana businesses to list on national securities exchanges.