The Pennsylvania Senate Banking and Insurance Committee on Wednesday advanced legislation to allow state-legal cannabis businesses better access to banking, finance, and insurance services. The measure, sponsored by the committee’s chairman, state Sen. John DiSanto (R), and its Minority Chair Sharif Street (D), would not require banks to serve the industry but would provide them safe harbor for institutions and would allow state cannabusinesses to deduct ordinary business expenses on their Pennsylvania taxes.
“Access to financial and insurance services is essential for operating any business and it is against the public interest to relegate a multi-billion-dollar industry to deal in piles of cash. Banking this cash safely in Pennsylvania provides certainty for businesses, is a huge opportunity to grow our economy, and should ultimately lower costs for medical cannabis consumers.” – DiSanto in a statement
Pennsylvania Cannabis Coalition Executive Director Meredith Buettner said the measure would “not only expand financial access for Pennsylvania’s legitimate cannabis-related businesses but will also create significant tax savings for medical marijuana operators that can be passed on to patients without significant loss of revenue for the Commonwealth.”
Under federal Financial Crime Enforcement Network (FinCEN) guidance issued in 2014 – known as the Cole Memo – banks are allowed to serve the cannabis industry but require them to file Suspicious Activity Reports on the businesses and the memo outlines several red flags that would require banks to report businesses that could be out of compliance with the memo’s provisions. The memo does not normalize federal taxes for the industry and does not require banks to serve cannabis companies, which had led the industry to operate on a mostly-cash basis.
The proposal was unanimously approved by the Senate committee
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