Legalizing Marijuana Could Bring Business Challenges, Vt. Banking Regulator Cautions - NECN
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Legalizing Marijuana Could Bring Business Challenges, Vt. Banking Regulator Cautions

Vermont's commissioner of financial regulation testified before a Vermont Senate panel Wednesday

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    Vermont's commissioner of financial regulation outlined business concerns lawmakers may want to keep in mind as the State Senate moves forward. (Published Wednesday, Jan. 20, 2016)

    Vermont's commissioner of financial regulation outlined business concerns lawmakers may want to keep in mind as the State Senate considers allowing the creation of new storefronts and lounges to legally sell small amounts of recreational marijuana in Vermont to adults 21 or over, with tight regulations.

    Susan Donegan told the Senate Finance Committee that theoretical pot shops may have to be cash or check-only. There are legal uncertainties with credit and debit cards, she noted, because the Feds see marijuana very differently than how Vermont is thinking about handling it.

    "Marijuana is illegal at the federal level," Donegan pointed out.

    Most insurance companies do not want to deal with marijuana sellers either, Donegan cautioned, so insurance rates on new businesses would likely be quite high.

    But in a reversal of an earlier theory, Donegan said Wednesday that banks should feel comfortable opening accounts with pot retailers. She told lawmakers on the committee that the FDIC appears to be turning its head a bit, and is guaranteeing deposits of customers who are authorized by individual states as marijuana retailers.

    "As late as this morning, the issue is evolving," Donegan told the panel, after a discussion with the FDIC. "I guess they read the Federal Deposit Insurance Act and they saw there was no prohibition against insuring the account."

    The committee also dialed long-distance, to hear from states that already legalized marijuana through licensed retailers.

    "Any investor or financier also has to go through a criminal background check the same way an applicant [for a retail license] does," Rick Garza of the Washington State Liquor and Cannabis Board told the panel by phone.

    "When you are trying to get new businesses in the state, you have to educate them how to pay the taxes and contribute to the tax base," said Larson Silbaugh of the Colorado Legislative Council. “There is an education component to this.”

    Even though it was the Senate Finance Committee considering the business questions, all eyes are really on the Senate Judicial Committee. That is the committee that will decide to advance any legislation. The committee vote is scheduled for January 29, committee chairman Sen. Dick Sears, D-Bennington County, said earlier this week.