Pennsylvania governor signs marijuana banking and insurance reform bill into law

Pennsylvania’s governor signed a bill Monday that includes provisions to protect banks and insurers in the state that work with licensed medical marijuana businesses.

Pro-legalization Gov. Tom Wolf (D) approved the measure sent to his desk by the Republican-controlled Legislature, which mirrors a stand-alone bill that had previously advanced before being attached to a separate measure.

As a standalone measure, cannabis banking reform passed the Senate earlier this year and also cleared a House committee last month. But the lead sponsor, Sen. John DiSanto (R), then filed it as an amendment to the now-signed HB 311, which deals with allowing certain financial institutions to run savings promotion programs.

Pennsylvania’s cannabis legislation is another example of how states are working to provide protections to financial institutions willing to serve the cannabis market while Congress continues to hold off on a federal decision.

The amendment included in the passed measure would not immunize banks and insurers from potential federal consequences, but it was an interim step designed to signal to the financial sector that they would at least not face penalties under state law.

It states that “a financial institution authorized to carry on business in this Commonwealth may provide financial services to or for the benefit of a lawful cannabis-related business and the business associates of a lawful cannabis-related business.” The same protections will be codified for insurers.

However, he also specified that the law would not require banks or insurers to provide services to medical marijuana businesses.


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The legislation states that state government agencies cannot “prohibit, penalize or otherwise discourage a financial institution or insurer from providing financial or insurance services to a lawful cannabis business or to the business associates of a lawful cannabis business.”

It also says the agencies cannot “recommend, incentivize or encourage a financial institution or insurer” not to provide services just because a business is marijuana-related.

In addition, state agencies cannot “take adverse or corrective supervisory action on a loan made to a legitimate cannabis-related business,” the text says.

The House of Representatives introduced its own version of the marijuana banking bill in April, which also includes provisions for tax breaks for the industry that were removed from the Senate measure before passage.

Providing protections at the state level could increase pressure on lawmakers in Congress to enact federal change, such as the bipartisan Safe and Fair Execution (SAFE) Act, passed in some form six times so far, only to stall in the Senate.

There had been hopes that lawmakers in Congress would include federal banking reform in a sweeping manufacturing bill known as the America Competes Act that is in bicameral conference, but leadership in both chambers reportedly recently reached an agreement not to mention that language in the interest of expediting the adoption of broader legislation.

Separately, SAFE Banking was recently proposed as an amendment to a sweeping defense bill, and the House Rules Committee is expected to determine whether it made it for consideration on Tuesday. The banking measure could also be part of a package of additional marijuana proposals being considered in high-level bicameral negotiations.

In addition, congressional leaders are proposing a number of marijuana policy changes in recently released spending legislation, including a bank protection provision to give the cannabis industry access to the banking system.

In Pennsylvania, a panel of lawmakers separately approved an amendment last month that seeks to make medical marijuana businesses eligible for state tax breaks for expenses they are currently barred from claiming under federal tax law.

The amendment by Rep. Aaron Kaufer (R) was attached to a broader tax code reform bill that passed the House Finance Committee.

The legislation would only apply to medical marijuana businesses’ state taxes, meaning those businesses would still have to contend with an Internal Revenue Service (IRS) code known as 280E that prevents businesses that operate with federally controlled substances, to make key tax deductions in their federal filings. But under the amended legislation, they could see some relief from the state.

In line with this, New York’s governor also recently signed a budget proposal that similarly includes provisions allowing marijuana businesses to enjoy state tax breaks available to other industries, despite the ongoing federal ban on cannabis.

Rodney Hood, board member and former chairman of the National Credit Union Administration (NCUA), has repeatedly emphasized the urgent need for a federal solution to the marijuana banking problem. He recently applauded efforts by lawmakers in states like Pennsylvania to address the problem within their jurisdictions, but said it was not enough.

An organization representing mayors across the U.S. recently passed a resolution imploring Congress to pass a bill to protect banks that operate state-legal marijuana businesses from federal penalties.

A coalition of cannabis regulators representing 40 US states and territories recently explained to lawmakers in Congress what the current lack of access to traditional financial services means—not only for the businesses and programs they oversee, but also for the regulators managing this conflict between federal states themselves.

Meanwhile, back in Pennsylvania, a Senate committee approved a bill last week that would protect medical marijuana patients against DUI charges unless they are actively impaired behind the wheel.

Bartolotta first introduced an earlier version of her bill in June 2020. At the time, she said the state should “ensure that the legal use of this drug does not result in a criminal conviction.”

Months after introducing the stand-alone reform legislation, the Pennsylvania House approved a separate amendment that would enact the policy change, but it was not passed into law.

Pennsylvania legalized medical marijuana in 2016, with the state’s first dispensaries opening in 2018. But the state’s zero-tolerance DUI law does not yet reflect those changes. Because it criminalizes the presence of any THC or its metabolites in a driver’s blood — which can be detected weeks after a person’s last use — the law puts virtually all medical marijuana patients at risk, even if it’s been days since their last use. use and they show no signs of damage.

Activists from North Dakota are officially submitting signatures for the initiative to legalize marijuana

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