U.S. Treasury Secretary Janet Yellen expressed her support for legislation to resolve the conflict between federal and state laws concerning marijuana sales and usage during a hearing at a U.S. House of Representatives Appropriations subcommittee on Thursday.
Yellen acknowledged the significant challenge faced by cannabis businesses, which are unable to access the banking system due to the inconsistency between state and federal regulations.
This lack of banking access forces marijuana companies to operate primarily in cash, posing security risks and hindering their ability to secure financing.
Republican Representative David Joyce highlighted the longstanding nature of this issue, noting that little progress has been made since he first raised concerns with former Treasury Secretary Steven Mnuchin five years ago.
Despite the legalization of marijuana for medical or recreational use in many states, it remains classified as illegal at the federal level, complicating financial transactions for cannabis-related businesses.
Yellen reiterated her stance on the matter, emphasizing the need for legislative action to clarify banks’ responsibilities and provide them with the confidence to engage with cannabis firms.
She emphasized that the federal prohibition on marijuana creates reluctance among banks to offer services to these businesses, exacerbating the existing challenges.
While Yellen did not specify the essential provisions of such legislation, she expressed openness to measures that would address the concerns of banks and alleviate the operational hurdles faced by cannabis companies.
Democratic Representative Steny Hoyer echoed Yellen’s sentiments, emphasizing the bipartisan nature of the issue and pledging support for legislative efforts to mitigate risks faced by cannabis businesses and their employees.
