Thursday , August 22 2019
Home / Cato Liberty / Fed Chair High on Banking Reform for Cannabis Industry

Fed Chair High on Banking Reform for Cannabis Industry

Summary:
Advocates of marijuana legalization, and owners of cannabis-oriented companies, received a positive boost this week when Jerome Powell, the Federal Reserve Chair, testified to Congress that providing clarity to banks dealing with the cannabis industry would be desirable: “I think it would be great to have clarity,” Powell said from Capitol Hill. “It puts financial institutions in a very difficult place and puts the supervisors in a difficult place, too. It would be nice to have clarity on that supervisory relationship.” (CNBC) Powell’s testimony comes as a new draft of the Secure And Fair Enforcement Banking Act of 2019 (SAFE Act) is circulating. The legislation would expand dispensary and other cannabis company access to formal banking – allowing a shift away from cash-based

Topics:
Jeffrey Miron considers the following as important:

This could be interesting, too:

Wolf Richter writes Repo Market Problems & Ballooning Inventories of Treasuries at Primary Dealers Make it into the Fed’s Minutes. My Fancy-Schmancy “Fed Hawk-o-Meter” Jumps

Tyler Durden writes China’s Ultimate Play For Global Oil Market Control

Tyler Durden writes ‘A Total Failure’: Homeless Crisis In Progressive Cities Reaches Fever Pitch 

Tyler Durden writes 4 Compelling Reasons To Be Thinking About Gold

Advocates of marijuana legalization, and owners of cannabis-oriented companies, received a positive boost this week when Jerome Powell, the Federal Reserve Chair, testified to Congress that providing clarity to banks dealing with the cannabis industry would be desirable:

“I think it would be great to have clarity,” Powell said from Capitol Hill. “It puts financial institutions in a very difficult place and puts the supervisors in a difficult place, too. It would be nice to have clarity on that supervisory relationship.” (CNBC)

Powell’s testimony comes as a new draft of the Secure And Fair Enforcement Banking Act of 2019 (SAFE Act) is circulating. The legislation would expand dispensary and other cannabis company access to formal banking – allowing a shift away from cash-based operation – and protect investors and bankers from the current potential legal consequences of providing financial services to the cannabis industry.

Expanding these legal protections will not only allow banks and investors to participate in a rapidly growing market; it might also increase pressure on the federal government to legalize – or at least de-schedule – marijuana.

Research assistant Erin Partin co-authored this blog post.

Leave a Reply

Your email address will not be published. Required fields are marked *