Federal Reserve Chief signals:
Federally Chartered Banks won’t take Cannabis money until Federal guidance comes
“This is a very difficult area, because many state laws permit the use of marijuana and federal law still doesn’t,” Fed chief, Jerome Powell said at a press conference. “So it puts federally chartered banks in a very difficult situation.”
The chairman of the Federal Reserve, Jerome Powell, signaled that the central bank is not prepared to allow federally chartered banks to serve marijuana businesses in legal markets. At least not until lawmakers clarify discrepancies between state and federal law.
U.S. senators have pitched a bipartisan bill that would resolve banking issues for cannabis businesses in legal markets, but analysts say marijuana bills face an uphill battle ahead of November’s midterm elections. As if to underscore that, a House committee rejected a marijuana banking measure, Forbes reported.
State banks without federal charters can do business with cannabis companies in states with legal medical and recreational markets, but a federal solution would provide more security for cannabis businesses.
Banking is a huge pain point for cannabis companies, so some states are proposing their own solutions. Members within the Cannabis industry complain that they face security as well as practical difficulties by banks’ refusal to do business with the multibillion-dollar industry.
Cannabis Merchant service providers have filled up the gap to meet marijuana banking solutions. Merchant account service providers like Paybotic, offer the varied range of services including cannabis credit card processing, cannabis payment processing, gift card processing and other merchant services.