Legislation has been introduced in the Delaware General Assembly aiming to protect banks and other businesses that provide financial services to marijuana cultivators, distributors, and retailers who operate within Delaware’s legal cannabis marketplace.
House Bill 355, sponsored by Representative Ed Osienski and Senator Trey Paradee, and in partnership with State Treasurer Colleen Davis, clarifies that these financial services are legal under Delaware state law and aims to reassure financial service providers that they can safely provide their services to legal marijuana businesses without risking criminal liability.
“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,” said Treasurer Colleen Davis.
Davis continues; “H.B. 355 will provide state-level legal protection, and a clear legal framework for banks, payment processors, and other financial service providers to follow. It can also ease concerns about federal enforcement and regulatory compliance among these businesses – since it allows them to demonstrate to federal agencies that they’re following a clear legal framework, ultimately leading to a safer and more transparent marijuana industry.”
Key provisions of the legislation include:
- Protection: Provides state-level legal protection, thereby reducing banks’ fear of prosecution or penalties.
- Enables Secure Transactions: Allows marijuana businesses to utilize traditional banking methods, eliminating the dangers and inefficiencies associated with managing large amounts of cash.
- Boosts Local Economy: Facilitates investment and growth within the Delaware marijuana industry, leading to increased revenue and job opportunities.
- Enhances Safety: Promotes greater safety for retailers and their customers, as cash-intensive activity is more prone to theft, robbery, & violence.
- Competition: Encourages more financial-related service providers to enter the legal marketplace, which will result in more competition, lower prices, improved services, and potentially decrease the amount of marijuana business taking place within the black market.
“Across the country, we’ve witnessed dispensaries and banks alike struggling with legal uncertainty surrounding financial and accounting services for cannabis businesses. This uncertainty 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,” said Rep. Ed Osienski. “We want Delaware’s safe and regulated industry to out-compete the black market. 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.”
“At the end of the day, cannabis retailers in Delaware are small businesses. They serve our communities. They will hire Delawareans. They will pay their taxes. They will contribute to the economic development of this State. But with an over-reliance on cash-transactions, retailers are at a disadvantage in terms of their banking, compliance, and safety needs,” Sen. Paradee said. “With the passage of this legislation, the State can ensure that these types of businesses have a clear path towards access to those critical services.”
Protecting banking services will also serve to make operations safer for other businesses in the industry.
“The inability to access traditional banking services presents a serious challenge for Delaware’s marijuana businesses,” says Rob Coupe, Delaware’s Marijuana Commissioner. “Cash-intensive operations leave the businesses vulnerable to theft and other crimes, and present additional obstacles in their efforts to comply with tax laws.”
“This legislation will give Delaware cannabis retailers access to essential CPA services to ensure their financial success,” said Dana Rubenstein, President & CEO, Delaware Society of Certified Public Accountants.
The full text of H.B. 355 can be found here.
