Pennsylvania governor signs marijuana banking and insurance reform bill

Pennsylvania’s governor signed a bill Monday that includes provisions to protect banks and insurers in the state that work with licensed medical marijuana businesses.

Pro-legalization Gov. Tom Wolf (D) approved the measure sent to his desk by the Republican-controlled Legislature, which mirrors a standalone bill that was previously advanced before being attached to a separate measure.

As a standalone measure, cannabis banking reform passed the Senate earlier this year, and also passed a House committee last month. But the lead sponsor, Sen. John DiSanto (R), then introduced it as an amendment to the now-signed HB 311, which deals with authorizing certain financial institutions to conduct savings promotion programs.

Pennsylvania’s cannabis legislation is another example of how states are working to provide protections for financial institutions willing to serve the cannabis market as Congress continues to stall on federal regulation.

The amendment included in the measure passed will not immunize banks and insurers from potential federal consequences — but it represents a temporary step intended to signal to the financial sector that they will at least not face penalties under state law.

It states 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 business associates of a legitimate cannabis-related business.” The same protections will be codified for insurers.

However, it also specifies that the law will not require banks or insurers to provide services to medical marijuana businesses.


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The legislation states that state government agencies cannot “prohibit, penalize, or otherwise discourage a financial or insurance institution from providing financial services or insurance to a legitimate cannabis-related business or business associates of a legitimate cannabis-related business.”

It also says the agencies cannot “recommend, incentivize or encourage a financial or insurance institution” not to provide services just because a business is related to marijuana.

Further, state agencies cannot “take adverse supervisory or remedial action on a loan made to a legitimate cannabis-related business,” the text says.

The House of Representatives introduced its version of the marijuana banking bill in April, which also included provisions for tax breaks for the industry that were removed from the Senate measure before passage.

Providing state-level protections could add pressure on congressional lawmakers to pass a federal amendment, such as the bipartisan Banking Safety and Fair Enforcement Act (SAFE) that has passed the House in some form six times at this point. only to stall in the Senate. .

There were hopes that lawmakers in Congress would include federal banking reform in a broad-scale manufacturing bill known as the America COMPETES Act that is in bicameral conference, but leadership in both chambers reportedly reached a deal recently to keep that language out in the interest of speed. the adoption of wider legislation.

Separately, SAFE Banking was recently offered as an amendment to a sweeping defense bill, and the House Rules Committee is expected to determine whether it is up for consideration on Tuesday. The banking measure could also be a component of a package of additional marijuana proposals being considered in high-level bicameral talks.

Additionally, congressional leaders are proposing a number of marijuana policy changes in recently released spending legislation, including a provision to provide banking protections to give the cannabis industry access to the banking system.

In Pennsylvania, a panel of lawmakers separately approved an amendment last month aimed at making it possible for medical marijuana businesses to receive state tax deductions for expenses they are currently barred from claiming under federal tax law.

Amendment by Rep. Aaron Kaufer (R) is attached to a broader tax code reform bill that passed the House Finance Committee.

The legislation would only apply to state taxes on medical marijuana businesses, meaning those firms would still have to contend with an Internal Revenue Service (IRS) code known as 280E that exempts businesses that work with federally controlled substances to make the main tax deductions in their federal. the files. But under the amended legislation, they could see some relief from the state.

Relatedly, New York’s governor also recently signed a budget proposal that similarly includes provisions to allow marijuana businesses to receive state tax breaks that are available to other industries despite a ban. ongoing federal cannabis.

Rodney Hood, a board member and former chairman of the National Credit Union Administration (NCUA), has repeatedly emphasized the urgent need for a federal solution to the marijuana banking problem. He recently applauded efforts by lawmakers in states like Pennsylvania to address the issue within their jurisdictions, but he said that’s not enough.

An organization representing mayors from across the US recently passed a resolution urging Congress to pass a bill to protect banks that work with state marijuana businesses from federal penalties.

A coalition of cannabis regulators representing 40 US states and territories recently explained to lawmakers in Congress what the current lack of access to traditional financial services means — not just for the businesses and programs they oversee, but for regulators navigating the this federal-state conflict themselves.

Meanwhile, back in Pennsylvania, a Senate committee approved a bill last week that would provide protections for medical marijuana patients against facing DUI charges unless they are actively impaired behind the wheel.

Bartolotta first introduced an earlier version of her bill in June 2020. She said at the time that the state must “ensure that the legal use of this drug does not result in a criminal conviction.”

Months after the stand-alone reform legislation was introduced, the Pennsylvania House passed a separate amendment that would have adopted the policy change — but it was not passed into law.

Pennsylvania legalized medical marijuana in 2016, with the state’s first dispensaries opening in 2018. But the state’s zero-tolerance DUI law still doesn’t reflect those changes. Because it criminalizes the presence of any THC or its metabolites in a driver’s blood — which can be detected for weeks after a person’s last use — the law puts almost all medical marijuana patients at risk, even if days have passed since their last use and they show no signs of damage.

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