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McReynolds | Vardanyan LLP Honest. Dependable. Compassionate.
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Los Angeles Cannabis Banking Lawyer

Businesses of all kinds need income to function. Start-ups need loans and investment, and once income starts rolling in, the money needs to be stored somewhere. Regulations must be followed, taxes must be paid. Cannabis businesses face unique problems with banking and finance issues because the industry is not fully legalized across the nation. There are, thankfully, options available to cannabis enterprises that go beyond stuffing sale proceeds into a mattress.

If you are interested in setting up a marijuana business in Southern California, or if you already have a dispensary and are facing any cannabis or business law issues, the marijuana business attorneys at McReynolds Vardanyan, LLP are here to help. Our medical cannabis legal team is at the cutting-edge of this rapidly changing industry, keeping on top of all new developments as the laws in California and around the country evolve. We’ll help you obtain financing, comply with all appropriate regulations, and provide tailored solutions to fit your business goals and financial needs. We are well-suited to help you get your cannabis farm, dispensary, or other marijuana business up and running, and to resolve any regulatory, business law, litigation, or cannabis law-related issues that may arise.

Federally-Insured Banks

Marijuana remains unlawful under federal law for any purpose. Although federal agents and prosecutors are under guidance to avoid pursuing marijuana operations that are permitted under state law, banks are another matter. The majority of lenders across the country are federally insured; as part of that insurance, those banks are not permitted to help businesses or individuals commit “crimes.” Servicing a cannabis company might classify as aiding in a “criminal enterprise” based on current federal law. Unfortunately, that means that most banks are unwilling to provide loans to or hold accounts for cannabis businesses.

Banking Options for Cannabis Enterprises

Cannabis and hemp businesses do have options for obtaining financial services. Banks that are not federally insured may be willing to service cannabis businesses without fear of running afoul of federal law. State-chartered credit unions can service marijuana businesses so long as they comply with federal guidelines and other regulations. Hemp businesses, moreover, have a wider range of options given the less stringent regulations present in the hemp industry.

A seasoned marijuana banking lawyer at McReynolds Vardanyan can help you understand your options for securing financing and other financial services. The law is rapidly changing in California and around the country. With the right legal team on your side, you can keep abreast of new developments and ensure that your business is able to operate efficiently, profitably, and legally.

Federal Cannabis Prohibition and New Developments

The primary reason that banking in the cannabis industry is a challenge is that marijuana remains illegal under federal law. Marijuana is still listed as a Schedule I substance according to the Controlled Substances Act, alongside drugs like heroin, methylenedioxymethamphetamine (ecstasy), and lysergic acid diethylamide (LSD). Federally-regulated banks are wary of risking their certification by supporting an “illegal” business.

Should marijuana be legalized or decriminalized at the federal level, cannabis banking would become much simpler. There’s hope that marijuana will be decriminalized in the near future; 18 states have legalized the recreational sale and use of marijuana to date. Moreover, on April 1, 2022, the House of Representatives passed a bill to federally decriminalize marijuana, which would go so far as to expunge the records of people convicted for non-violent cannabis offenses. Senate Democrats have a similar bill working through the legislative process.

Any cannabis decriminalization bill still needs to pass the Senate, where it would need a 60-vote majority. Unfortunately, there are enough conservative senators who have expressed opposition to legalization that the prospects of passage are slim. Should Senate composition change, or a surprise upset occur, President Biden (or whoever takes office next) would still need to sign the bill.

House Democrats also passed a bill to prohibit federal banking regulators from penalizing banks for providing banking services to otherwise legitimate cannabis-related businesses. Because the Secure and Fair Enforcement (SAFE) Banking Act is limited to financial regulation as opposed to full decriminalization, there is a greater prospect for bipartisan support. Talk to a savvy cannabis business attorney for updates on the latest developments in cannabis law.

Get Help From Our Marijuana Business Lawyers

If you are interested in setting up a marijuana business in Los Angeles or Southern California, or if you have questions regarding your cannabis distribution center or dispensary, call McReynolds Vardanyan, LLP in Glendale at 818-855-2115. Our California cannabis lawyers are available 24/7 and are ready to help you step through the legal hoops necessary to get your budding business off the ground effectively, efficiently, and legally.

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