New York lawmakers will hold a joint meeting of two committees next month to consider establishing a “legal framework” to provide banking services to the state’s marijuana industry.
The Assembly Banks Committee and Economic Development, Job Creation, Commerce and Industry Committee announced the May 11 public hearing on Monday. People interested in testifying are being encouraged to fill out a form and submit it “as soon as possible.”
While New York legalized adult-use cannabis, opening the first handful of licensed retailers in recent months, federal prohibition locks businesses out of traditional financial services, resulting in a largely cash-only business model that legislators are working to address.
“Operating a cash-only business raises challenges including security, payroll, access to loan products, and record-keeping,” a hearing memo says. “These challenges impact both the legal cannabis-related businesses and the banks seeking to provide services.”
The notice discusses how the U.S. attorney general has indicated that the Justice Department may reinstitute federal guidance on enforcement priorities, and California and Colorado have used separate 2014 guidance from the Financial Crimes Enforcement Network (FinCEN) to open state-chartered banks and credit unions to service the state cannabis markets.
The New York committees “seek to analyze challenges and barriers to providing banking services to legal adult-use cannabis businesses and examine pathways to allowing banking services to the burgeoning cannabis industry in New York,” the notice says.
The committee is asking people who wish to testify to complete a reply form that is attached to the hearing notice.
“Oral testimony will be limited to five minutes’ duration. In preparing the order of witnesses, the Committees will attempt to accommodate individual requests to speak at times in view of special circumstances. These requests should be made on the attached reply form or communicated to Committee staff as early as possible. Ten copies of any prepared testimony should be submitted at the hearing registration desk. The Committees would appreciate advance receipt of prepared statements.”
New York lawmakers have already introduced several pieces of legislation this session to either create a public bank to serve the cannabis industry or to formally study they topic.
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The public hearing announcement comes days after a state senator disclosed the formation of a Senate Cannabis Subcommittee that will “provide an outlet for entrepreneurs, advocates, industry and citizens with an interest in the new marketplace.”
The chair of that panel, Sen. Jeremey Cooney (D), filed a bill last year to allow regulators to disclose certain information about cannabis licensees to financial institutions as a step toward giving the financial sector more peace of mind about banking the industry.
As efforts to pass bipartisan marijuana banking reform in Congress have continued to stall on the Senate side, state lawmakers have increasingly pushed for state-level fixes.
That said, Senate Majority Leader Chuck Schumer (D-NY) said last week that he’s committed to passing a package of incremental cannabis reform bills that he worked to advance last year, and that’s expected to contain cannabis banking and expungements legislation.
Rep. Earl Blumenauer (D-OR), who filed a bill to allow marijuana businesses to take federal tax deductions last week, said at a recent press briefing that thinks it’s important that advocates and lawmakers align on any incremental proposals to end the drug war, warning against an “all-or-nothing” mentality.
Sen. Cory Booker (D-NJ) said last week that lawmakers are working to “resurrect” the so-called SAFE Plus package from last session, acknowledging that failure to advance a banking fix for the industry “literally means that hundreds of businesses go out of business.”