Alaska was in the vanguard of states legalizing marijuana for recreational use, passing a ballot initiative in 2014. Yet recent news suggests Alaska cannabis companies continue to deal with serious banking and insurance issues.
Credit Union 1 will reportedly discontinue its pilot program under which it was offering checking and savings accounts to marijuana-related business. Apparently, Credit Union 1’s insurance carrier indicated it would not renew the credit union’s insurance coverage due to the cannabis program. Also contributing, however, was the fact that only four marijuana-related businesses actually participated in the pilot program.
This story highlights the difficulties facing the marijuana industry and those tasked with creating marijuana policy. While there has been substantial focus on opening up banking for marijuana-related businesses, banks themselves need insurance. So if insurance companies remain wary of cannabis, even banks that want to offer marijuana services may not be able to do so. Fortunately, Congress appears aware of this, and is currently considering legislation known as the Clarifying Law Around Insurance of Marijuana Act (the “CLAIM Act,” H.R. 4074 and Senate Bill 2201). The Claim Act would provide insurers with a safe harbor to provide insurance to marijuana-related businesses, similar to what the Secure and Fair Enforcement Banking Act (the “SAFE Banking Act”) would do for banks. To be effective, the CLAIM Act and the SAFE Banking Act should be passed in tandem to insure that marijuana-related business have access to the full-range of necessary financial services.
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