Commentary: Utah and feds must resolve cannabis banking issue

The push for legalized medical cannabis in Utah is entering a crucial new phase.

Several recent polls indicate three-out-of-four Utah voters support legalized medical marijuana in some form. Stories of Utahns with chronic, painful conditions who might benefit from the use of medical cannabis have tugged at our heart strings. The opioid epidemic rightly compels us to consider alternative approaches to the management of pain, including cannabinoids, to the extent that such therapies prove effective by medical and scientific standards.

The Legislature passed and the governor signed legislation this year that allows terminally ill patients with less than six months left to live to use cannabis distributed by the state. In response to reports of tainted and unsafe cannabidiol, or CBD, products being sold in Utah, additional legislation was passed that provides for the regulation and testing of CBD by the state.

Advocates of a ballot initiative to more broadly legalize cannabis for medical purposes have gathered more than 133,000 verified voter signatures in an effort to put the matter before voters in November.

With any one of these measures, Utah joins 29 other states and three U.S. territories in its attempt to legalize a substance currently considered illegal under federal law. But cannabis remains a federally prohibited Schedule I drug, and banking regulations prohibit the state, or any other entity in Utah, from using a federally regulated financial institution to deposit funds from the production and distribution of cannabis, even if doing so is permitted under state law.

Issued in 2013, the U.S. Department of Justice’s “Cole Memorandum” took steps to solve this problem by essentially discouraging prosecution of cases for cannabis-related activities made legal under state law. Based upon that memorandum, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) developed guidance for financial institutions and made allowances for the banking of certain cannabis-related businesses.

On Jan. 4, U.S. Attorney General Jeff Sessions rescinded the “Cole Memorandum,” casting the issue of “cannabis banking” into a state of pronounced confusion and ambiguity. So for now, any federally regulated financial institution providing services to a cannabis-related enterprise operating lawfully under state law risks criminal and civil liability under the Controlled Substances Act.

While the FinCEN guidance still remains in effect, conflicting banking regulations prevent any cannabis-related enterprise (including one administered by a state) from accessing basic, necessary banking services. This represents an enormous public safety issue because cash-only cannabis businesses, their employees and their customers come under increased risk of violent crime, fraud and theft.

Putting aside the arguments for and against cannabis as a medical treatment, the fact remains there are businesses in other states operating lawfully under state law that are now under murky federal law and guidance. Without clarity at the federal level, states that have legalized the drug are faced with an impossible scenario.

We need the federal government to respect the move among states toward varying degrees of legalization and to better harmonize its laws regarding cannabis-related activities, particularly with respect to banking regulation. This is not a “red state” or “blue state” issue. It is one of states’ rights, public safety and humanitarianism.

David Damschen is Utah’s state treasurer.