NY Paves Way For Easier Cannabis Banking With Newly Signed Bill

New York State has taken a significant step towards easing the banking challenges faced by the cannabis industry with the passing of Senate Bill S1047. Sponsored by state Senator Jeremy Cooney (D-Rochester), the bill addresses critical banking issues for cannabis businesses.

Facilitating Financial Compliance And Safety

Under this new law, the Office of Cannabis Management is authorized to share licensee and applicant information with financial institutions. This move aims to streamline the ‘Know Your Customer’ compliance for banks dealing with cannabis businesses.

Cooney shared his enthusiasm about the bill on Twitter:

Overcoming Banking Hurdles

The federal classification of cannabis has historically hindered banking services for cannabis companies. Compliance costs and anti-money laundering regulations have dissuaded financial institutions from serving these businesses. This law aims to alleviate these barriers, improving access to banking services and enhancing public safety by reducing the risks associated with cash-only operations.

Furthermore, this bill also indirectly addresses the challenges posed by Tax Rule 280E. This federal tax code prohibits cannabis businesses from deducting normal business expenses, leading to significant financial strain. By facilitating better banking access, S1047 could indirectly help cannabis dispensaries manage their financial obligations more effectively, potentially mitigating some of the burdens imposed by 280E.

Enhancing Market Accessibility And Equity

The legislation is a step forward in ensuring safer and more regulated cannabis markets. By facilitating easier banking access, it also supports the social equity goals of the Marijuana Regulation and Taxation Act (MRTA), making the cannabis industry more accessible and secure for all participants.

Image by El Planteo