In 2015, Ohio voters declined to legalize marijuana for reasons from concerns about marijuana use to concerns about regulation ability, to concerns about the language and impact of the proposed constitutional changes. But in 2016, then-Gov. John Kasich signed House Bill 523 to legalize cannabis use for medical reasons. Medical marijuana is now legal in 33 states, with 11 of those also permitting recreational use for adults over age 21.
Then, of course, there is hemp, from the same plant, which has a variety of uses. The fibers are used in clothing, jewelry and rope. Especially mixed with lime, it can be used in building materials and mixed with fiberglass, it can become a composite panel for automobiles. The seeds can be eaten, cold pressed to make oil or ground into a meal.
CBD, short for cannabidiol, is a non-psychoactive chemical component as compared to the THC that causes the “high” from the marijuana plant. It is used for anxiety, attention and focus issues, sleep issues, pain and more. It is typically inhaled or taken orally. Its legal status is hazy and evolving rapidly, and its effectiveness is anecdotal, not well studied and controversial. Nevertheless, you have probably seen it for sale at all kinds of stores, including some unexpected places, as its popularity skyrockets.
With all the buzz about these products, of course the manufacturers and sellers – both unscrupulous and honorable – have risen to meet this growing demand and business is booming. And the banks want a piece of that pie. But the laws are not keeping up, and it can be difficult to determine what is and is not legal to do, make, grow, sell and use.
As a result, traditional banks are hesitant to work with entrepreneurs along the supply chain for these products. Those in the supply chain are finding it difficult to get basic banking services, such as deposit and spending accounts, payment processing services and loans as traditional banks are reticent to work with businesses that may seem on the “fringe” of legality.
In response, the U.S. House of Representatives passed the Secure and Fair Enforcement, or SAFE, Banking Act in late-September 2019, with significant bipartisan support. The bill’s intent was not to make sweeping changes to marijuana laws but, instead to clarify banks could safely finance and do business with these businesses. It was later amended to add some protection for insurers involved with such businesses.
However, the bill is now with the Senate’s Banking Committee. Sen. Mike Crapo, R-Idaho, who chairs the Senate Banking Committee, has stated via press release that he strongly opposes the SAFE Banking Act because it fails to address underlying concerns with the use of marijuana-derived products in general, potency of product, marketing to minors and several other reasons. At the present, it seems amendments are being floated and it will be interesting to see if and how the issue is addressed in 2020.
Andrew Zashin writes about law for the Cleveland Jewish News. He is a co-managing partner with Zashin & Rich, with offices in Cleveland and Columbus.