A quarter-three report for 2018 released by the Treasury Department’s FinCEN (Financial Crimes Enforcement Network) shows that the number of financial institutions that are doing business with marijuana businesses has increased by 20 percent from what it was at the start of this year.
The data gathered by FinCEN shows that 111credit unions and 375 banks had cannabis businesses as clients by the end of September.
This latest report has no surprises since previous quarterly reports by the agency showed a steady increase in the number of financial institutions willing to work with cannabis businesses even if national laws regard marijuana as an illegal substance.
The Q3 report comes hot on the heels of the electoral victories scored by marijuana in the midterm polls. Michigan voters approved adult-use cannabis while voters in Utah and Missouri voted in favor of medical marijuana.
The recent general political developments also seem to favor the marijuana industry in some form, especially when one considers the fact that the Democrats have taken control of Congress. National opinion polls also show record-high support for marijuana legalization, and the politicians may think twice before ignoring this tide.
Meanwhile, the ABA (American Bankers Association) started collecting data from its members regarding the challenges that they are facing as they serve the cannabis industry. The data collected will be used to apply pressure upon Congress and the relevant regulators to institute helpful reforms in the stifling banking laws.
At the same time, a number of key players in the federal government, such as the Treasury Secretary Steven Mnuchin, have expressed a willingness to find ways for cannabis businesses to keep their cash safely instead of in bags as is the current practice.
The Federal Reserve chair has also acknowledged that the current legal regime makes it hard for financial institutions to have any certainty regarding how to work with cannabis businesses in the states where cannabis is legal. He feels that this needs to change.
States where cannabis is legal are also speaking up in different ways. For example, financial regulators in 13 states wrote to Congress asking for protections for the banks doing business with marijuana businesses.
More hope for financial institutions is coming from the consensus that seems to be forming in both Congress and Senate in favor of new legislation geared at fixing the impasse between federal and state banking laws with respect to offering services to cannabis businesses.
The big question now is whether the Republican-leaning Senate will cooperate when it matters if the Democrats in Congress pass cannabis-friendly bills. VIVO Cannabis Inc. (TSX.V: VIVO) (OTCQX: VVCIF), Youngevity International, Inc. (NASDAQ: YGYI) and the entire cannabis industry would be glad if these two houses agreed and removed the existing ambiguity in the financial laws affecting cannabis banking.
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