4 Movements Pushing for Legitimate Cannabis Banking Services

4 Movements Pushing for Legitimate Cannabis Banking Services

Having traveled to the MJBizCon 2018 tradeshow and convention in Las Vegas recently, arguably the most pressing issue was the dire need for proper cannabis banking services and resources, like any other legal and legitimate business. It is well known that most legal cannabis dispensaries are relegated to straight cash payments, since any U.S. banks connected to the U.S. Federal Reserve – which is most of them – refuse to offer credit card processing services to cannabis businesses (cannabis is illegal by federal law, which supersedes state law).

The feds current stance leaves cannabis merchants with several problems and inconveniences:

  • We read that 17 percent of cannabis storefronts in Colorado suffered robberies in their first year of legalization – the result of storing mass amounts of cash.
  • Dispensaries are forced to spend a fortune on security and armored trucks to transport enormous amounts of cash to banks, several times daily.
  • Dispensaries are even warehousing cash on their own premises, the result of having to make deposits below $10,000.
  • Some dispensaries are even paying their taxes in straight cash.

Recently, we’ve been churning out content about the challenges and hurdles with cannabis banking, of which there aren’t too many – just several sizeable roadblocks that will take time and effort. However, there are also four movements which are advocating on the side of merchants for legitimate banking. Perhaps the most influential is The STATES Act, which we blogged about Monday, because it could have an immediate impact.

Cannabis merchants should be aware of the several other causes in motion.


Just a refresher: Should it pass in 2019, The STATES Act will benefit everyone in the cannabis banking ecosystem. Among its goals include:

  • Immunity for dispensaries and the few banks offering services in legal states from federal prosecution.
  • Rescheduling (or even de-scheduling) of cannabis from a Schedule 1 drug. The World Health Organization’s Expert Committee on Drug Dependence (ECDD) is a driving force behind the rescheduling/de-scheduling effort.
  • Paving the way for legitimate banking services and merchant accounts for cannabis businesses.

Though The STATES Act may be the movement that is carrying the most influence, there are other causes cannabis merchants should be behind.

The Hemp Farming Act of 2018

In March, Senate Majority Leader Mitch McConnell (R, Kentucky) put forth The Hemp Farming Act which would legalize hemp farming in all 50 states. If passed, the Hemp Farming Act would accomplish four key things:

  • Remove cannabis with low THC levels from the Controlled Substances Act, similar to what The States Act is hopeful of accomplishing.
  • Make hemp farmers eligible for agricultural grants from the federal government and crop insurance.
  • Allow for proper banking services for hemp farmers.
  • Enable hemp farmers to market their products and conduct necessary research.

Assembly Bill 2020

In California, Governor Jerry Brown signed Assembly Bill 2020 into law on Sept. 26, 2018 (authored by Assemblyman Bill Quirk, [D, Hayward]), which grants local governments (towns and cities) the power to offer or refuse temporary cannabis licenses for events.

Though AB 2020 is limited to the state of California and may not seem like a major victory, it is a significant step in the direction of legalization. Other states, likely those which haven’t yet legalized cannabis for recreational use, have a chance to observe California’s local and community governments deciding how temporary cannabis permits for events such as festivals, workshops and other events, as well as how those events benefit the communities.

Rohrabacher-Leahy Amendment

Basically, the Rohrabacher-Leahy Amendment advises the federal government to let each state handle marijuana issues as they see fit. In one way, Rohrabacher-Leahy is similar to The STATES Act: it blocks the Department of Justice from using federal funds to impose federal law on the growth, use and sale of medical cannabis. Instead, it allows states to enforce their own laws to oversee all things medical cannabis. The amendment was tabled in 2014 and has been reaffirmed each year since.

We’re hopeful of more legislation — for cannabis banking

With several legislative acts in motion, we’re optimistic that cannabis banking services will become a reality, as soon as 2019. Instabill has forged several partnerships over the last few months to enable cannabis merchants to accept payments from customers and patients.

We prefer to begin the merchant account partnership by having an initial 10-minute conversation about your business. Have that conversation today with one of our merchant account managers at 1-800-530-2444.

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