Cannabis may be legal for recreational use in Illinois, but the federal schedule I classification—specifically, a drug that is perceived to have no medical use and high potential for abuse—is causing major issues for dispensaries across the country.
New legislation coming out of Washington DC hopes to bring the billion-dollar industry out of the shadows and into the sunlight.
Consumers at medicinal and recreational cannabis dispensaries know that it is usually cash-only for all purchases, and if you are lucky, you can use a debit card or access an ATM on-site to take out money.
And this is not just problems faced by consumers. Dispensaries themselves usually cannot use any of the services provided by banks or credit unions such as direct deposit, checks or credit card transactions. If they do, financial institutions risk losing their charter, or license, to operate if they accept any funds tied to cannabis.
In Illinois, six banks have federal permissions to deal with cannabis funds, and 90 percent of the state’s dispensaries place deposits there. However, there are still major fees for doing so.
According to Illinois State Treasurer Michael Frerichs, only allowing six banks to provide services severely limits the state’s marijuana’s industry.
“There are legitimate businesses, organized and operating in the state of Illinois, who do not have access to the same banking system that every other legitimate business does,” he said. “This is a big step in the right direction that will bring a lot of clarity and safety if it passes.”
Frerichs says the bill would also allow any businesses that work directly with the dispensaries, like a contractor or plumber, to avoid any legal issues themselves when receiving payment.
The US House passed the Secure and Fair Enforcement (SAFE) Banking Act on April 26. It must pass through the Senate and receive President Joe Biden’s signature to become law.