Oklahoma Votes to Legalize Medical Marijuana, But Federal Regulations Will Complicate Banking
In June of 2018, Oklahoma voters went to the polls and voted ‘yes’ on State Question 788. Better known as Oklahoma’s medical marijuana legalization initiative, this ballot question passed by a considerable margin, with voters approving of the legalization of medical marijuana by a margin of 57 percent to 43 percent.
But as Oklahoma joins a long line of states permitting the medical marijuana industry, state officials and business leaders are now learning just how much federal banking law complicates the operation of medical marijuana companies.
It is important to note that federal law has not changed. Marijuana, including medical marijuana, is still strictly prohibited as a matter of federal law. For this reason, medical marijuana businesses are largely prevented from working with banks, at least in the normal manner. In the eyes of the federal government, cash that was made in association with medical marijuana sales is nothing more than ‘drug proceeds’. Banks that help to facilitate the unlawful distribution of controlled substances can face major financial liability.
The Oklahoma banking law attorneys at the Tulsa-based law firm of Drummond Law, PLLC noted that “before banking with medical marijuana businesses, financial institutions in Oklahoma must have the proper system in place. This is an incredibly complex and fast-changing area of banking law. There are significant risks to working with marijuana businesses, and there are very strict reporting requirements for the banks that choose to do so. High ranking executives and board members at banks could even face personal liability if they violate federal law. In the current climate, few financial institutions are open to marijuana-related businesses.”
Oklahoma banks will now be dealing with many of the same questions regarding medical marijuana that banks are already facing in many other states all across the country. The banking environment for legalized marijuana became even more uncertain in recent months. Earlier this year, Attorney General Jeff Sessions rescinded the ‘Cole Memo’. The ‘Cole-Memo’ refers to a policy created by the Obama Department of Justice that stated that federal law enforcement operations will generally avoid any interference with legalized marijuana businesses within individual states.