BILL NUMBER: S8758

SPONSOR: COONEY
 
TITLE OF BILL:

An act to amend the cannabis law, in relation to sharing information
obtained from applicants and licensees

 
SUMMARY OF SPECIFIC PROVISIONS:

Section one authorizes the Office of Cannabis Management to share licen-
see and applicant information with requesting financial institutions.

Section two provides the effective date.

 
JUSTIFICATION:

Federal scheduling of cannabis creates challenges to banking licensed
cannabis companies. Due to rigorous federal compliance rules and anti-
money laundering laws, financial institutions face increased costs and
little to no incentive to take on cannabis businesses as clients. A
financial institution servicing a cannabis business must make a suspi-
              

cious activity report for every transaction the client makes with the
bank. The costly burden imposed by additional compliance and reporting
measures prevents most financial institutions from banking cannabis
companies, even if they want to.

This legislation authorizes the Office of Cannabis Management to
disclose information about licensees and applicants to financial insti-
tutions requesting information. This will allow financial institutions
to have access to verify personal and financial information for their
prospective cannabis clients. It will improve the 'Know Your Customer'
compliance and make it easier and less costly for financial institutions
who want to bank cannabis businesses to comply with the federal report-
ing.

Access to financial services is not just an economic issue, it also
impacts public safety. Cash businesses are more readily exploited for
money laundering and other nefarious purposes, which undermines the
public policy goal of creating safe, legal and regulated markets.  Addi-
tionally, it creates personal safety risks for the cannabis workers
handling the large amounts of cash. This legislation furthers the social
equity goals set in the MRTA by removing some of the financial and
systemic barriers that can prevent individuals from actually participat-
ing in the market safely.

 
PRIOR LEGISLATIVE HISTORY:

This is a new bill.

 
FISCAL IMPLICATION:

To be determined.

 
EFFECTIVE DATE:

This act shall take effect immediately.