A cannabis banking bill authored by Pennsylvania Sens. John DiSanto (R-Dauphin/Perry) and Sharif Street (D-Philadelphia) passed the Senate Banking and Insurance Committee Wednesday.
Senate Bill 1167 authorizes but does not require financial institutions and insurers to provide services to state-legal cannabis regulations. The legislation would grant safe harbor protections from adverse state regulatory and legal action for servicing the cannabis industry. While the state is one of 37 to legalize medical cannabis, federal regulations do not immunize banking and insurance organizations from dealing with cannabis businesses, relegating them to a “cash-only” business operation.
“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,” DiSanto said. “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.”
The legislation would also allow the state’s medical cannabis industry to deduct ordinary business expenses when filing state taxes. The current U.S. IRS Code prohibits these deductions even though non-cannabis businesses use that as a standard tax filing practice.
“The Pennsylvania Cannabis Coalition applauds Chairmen DiSanto and Street for their work on state safe banking legislation. SB 1167 will 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,” said executive director Meredith Buettner.