“There’s this divide between the federal and the state perspective on the topic that puts banks in a kind of tricky position.”
By Rebecca Rivas, Missouri Independent
Missouri’s marijuana businesses will have fewer obstacles when it comes to accessing banking, but they must now get fingerprint background checks from all their new employees and contractors, under legislation that Gov. Mike Parson (R) signed on Thursday.
Few banks nationwide serve cannabis businesses and their owners—or even their auxiliary partners —because most want nothing to do with a business that sells a product the federal government still considers illegal. That’s true even in states that have legalized marijuana.
The governor signed a wide-ranging public safety bill that in part allows the Department of Health and Senior Services, which oversees the state’s marijuana program, to share inspections and other information banks need to serve cannabis businesses.
Because the state agency hasn’t had this authorization previously, banks have been repeating the work DHSS has already done to meet federal financial guidelines—something not all banks are equipped for.
“In lieu of doing our own inspections,” Jim Regna, CEO and founder of Triad Bank, told lawmakers in March, “it’d be very, very helpful for us to be able to get this information from the Department of Health and Senior Services to make the program fluid and keep us in compliance with federal regulators.”
Also under the legislation, everyone working in Missouri’s cannabis industry will now be required to submit to a fingerprint background check.
Under the constitutional amendment that voters passed in November to legalize recreational marijuana, only the owners of cannabis companies were required to submit their fingerprints to the Missouri Highway Patrol for a criminal background check. Employees currently undergo a background check but aren’t required to be fingerprinted.
This legislation extends the fingerprinting requirement to all employees, contractors and volunteers of cannabis businesses.
The provision had support from both DHSS and the Missouri Cannabis Trade Association, which represents marijuana professionals and business owners.
However, the fingerprinting requirement could slow down the process of getting new cannabis employees to work, just as the state is seeing a surge in job growth, a cannabis human-resource specialist told The Independent in April.
Supporters of the banking provision also said helping cannabis businesses get access to banking is a public safety issue. Major credit card companies don’t permit cannabis purchases. That means all transactions for cannabis businesses nationwide are done in cash.
“There’s this divide between the federal and the state perspective on the topic that puts banks in a kind of tricky position,” said Jackson Hataway, president of the Missouri Bankers Association previously told The Independent.
That divide has left businesses unbanked, victims of frequent robberies and at the mercy of companies offering banking services for exorbitant fees—some that have now been deemed in violation of federal financial laws.
The association is advocating for the federal SAFE Banking Act, which is proposed legislation aiming to allow banks to do business within states that have legalized marijuana. It’s cleared the House several times, but has not yet passed.
“So we remain in the current quagmire we’re stuck in,” he said, “where you have a lot of states like Missouri that have upward pressure from businesses to have a secure and safe banking environment. Because if they’re all cash, they’re very risky.”
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