As Illinois lawmakers move toward legalizing marijuana for recreational use, state Treasurer Michael Frerichs is pushing legislation to address banking prohibitions in the growing industry.
Marijuana operators throughout the country have faced banking issues for years. The drug remains illegal at the federal level, and banks hesitate to set up accounts or offer loans to marijuana companies for fear that regulators could see that as drug money.
There are financial institutions throughout Illinois that work with the cannabis industry, but not many.
Last year, the reversal of an Obama-era policy that discouraged prosecution of those operating under state marijuana laws spooked banks further. Bank of Springfield – the main bank serving Illinois medical marijuana companies at the time – pulled out of the industry.
Without a bank, marijuana companies might have to operate solely in cash. As Illinois’ cannabis industry grows, that could pose increasingly dire issues. The state’s medical cannabis program generated sales of $136.5 million last year. If the bill lawmakers are drafting to legalize recreational marijuana passes, the industry could generate sales of $224 million by 2022.
– Tribune News Service