Federal Reserve Chairman Jerome Powell is asking Congress to clarify the marijuana laws which are currently a gray area for the U.S. banking system.
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“This is a very difficult area because we have state laws, many state laws permit the use of marijuana and federal still doesn’t, so it puts federally chartered banks in a very difficult situation,” Powell told reporters during the Federal Reserve’s press conference following its policy meeting on Wednesday. Smaller banks without federal charters are free to do business in states where pot is legal.
Financial institutions await guidelines from the U.S. central bank on how to deal with marijuana businesses that need a bank. Thousands of licensed and regulated cannabis businesses operate traditionally on cash and many are unable to accept credit cards or write checks for payroll.
“It puts [Federal regulators] in a very, very difficult position and of course this isn’t, our mandate has nothing to do with marijuana. We’d just love to see it clarified,” he said.
Pot has become big business in the U.S. with nine states and the District of Columbia allowing for recreational marijuana use and 30 states permitting weed use for medical purposes. Legal cannabis is expected to grow to $40 billion by 2021 up from $16 billion in 2017, according to Arcview Market Research.
As the Fed waits for clarity on the guidelines, Democratic Senator Elizabeth Warren (D-MA) is leading a bi-partisan charge to give each state the right to determine how to oversee marijuana.
"States like Massachusetts have put a lot of work into implementing common sense marijuana regulations - and they have the right to enforce their own marijuana policies. The federal government needs to get out of the business of outlawing marijuana,” said Senator Warren.
Americans’ support for the legalization of marijuana continues to rise with 64% saying the use of marijuana should be made legal, according to a 2017 Gallup poll.