Bill allowing banks to do business with marijuana and hemp industry moves through state senate
RAPID CITY, S.D. (KOTA) - The South Dakota state legislature is trying to come up with a way for potential marijuana businesses in the state to bank legally and safely. This can be difficult for businesses as cannabis is still federally illegal.
The committee on Commerce and Energy in the state Senate passed House Bill 1203 Thursday. This would allow state-chartered banks to conduct transactions with licensed businesses that distribute marijuana and industrial hemp.
Because cannabis remains federally illegal, its industry has long relied on cash and black-market practices.
It also means that federally insured institutions aren’t able to take dispensary money.
Meghan Blake, a dispensary manager in Oregon, said that it’s difficult for businesses to use locally-chartered banks because of high fees.
“Because they’re taking all the fall and all the risk, they can charge whatever they want,” Blake said. “So, you must pay a yearly membership fee to be a part of the bank, and then on top of that you pay a monthly due, and then a percentage of how much cash is going through your business as well.”
Blake said that until the federal government steps in and changes the law, the black market can still thrive since the business model derives from that illegal history.
She also recommends that South Dakota, and other states drafting cannabis banking laws, be thorough and careful when considering federal illegality.
“With rules changing in your money, it will cause taxes to change, it will cause expectations to change and how everyone will be up to date with it,” Blake said. “So, making sure that they’re taking it very seriously and understanding that it’s still a federal weight against them.”
Blake encourages dispensaries and other cannabis-related businesses to start their bookkeeping and financial planning as early as possible.
The statehouse also passed H.B. 1100 to begin the process of implementing medical marijuana in the state.
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