The emerging cannabis industry in Illinois could collapse if certain federal and state banking rules are not changed, Illinois State Treasurer Michael Frerichs said this week.
Cannabis-related banking prohibitions that were written decades ago to squeeze illegal drug cartels are outdated today when 33 states and the District of Columbia now legalize cannabis in some form. Financial institutions that do business with the cannabis industry could be severely impacted If laws are not changed, Frerichs said.
“We have a banking crisis in Illinois and across our country because rules built decades ago have not kept up with changes in acceptable behavior and law,” Frerichs said. “What we have today is a system that says it is ok for some people to use cannabis but it is not ok for those in the cannabis industry to use banks and credit unions to write checks, access loans, and deposit money. That defies common sense and needs to change.”
Frerichs is advocating for legislation that would prohibit the Illinois Department of Financial and Professional Regulation (IDFPR) from any action that would penalize or dissuade banks and credit unions from serving cannabis-related businesses. The bill in the Illinois State General Assembly is co-sponsored by Rep. Jehan Gordon-Booth (D-IL) and Sen. Toi Hutchinson (D-IL).
“We have identified a problem, we have identified a solution, and we now must work together to bring clarity and safety to the cannabis-banking conundrum,” Gordon-Booth said.
At the federal level, Frerichs heads up a group from the National Association of State Treasurers that is seeking the same protections.
“I believe that access to banking services for legalized cannabis businesses will minimize illegal activities, increase safety and security for workers, and will bring tax compliance to legal cannabis industries in our state and to states around the country,” Duane Davidson, the treasurer for the state of Washington, said.