FINAL BILL REPORT

ESSB 5928

C 68 L 18

Synopsis as Enacted

Brief Description: Making financial services available to marijuana producers, processors, retailers, qualifying patients, health care professionals, and designated providers as authorized under chapters 69.50 and 69.51A RCW.

Sponsors: Senate Committee on Financial Institutions & Insurance (originally sponsored by Senators Rivers, Palumbo and Hasegawa).

Senate Committee on Financial Institutions & Insurance

House Committee on Judiciary

Background: Marijuana is classified as a Schedule I substance under the federal Controlled Substances Act. The manufacture, possession, or distribution of Schedule I substances is a criminal offense. On February 14, 2014, a Department of Justice memo was issued stating the money laundering statutes, the unlicensed money remitter statute, and the Bank Secrecy Act remained in effect regarding marijuana and the financial sector. It also reminded financial institutions that they could face potential criminal liability if they engage in business with marijuana-related businesses.

On January 4, 2018, U.S. Attorney General Jefferson B. Sessions issued a short memorandum rescinding previously issued guidance from the U.S. Department of Justice as to marijuana-related businesses and the provision of financial services to marijuana-related businesses. Sessions' January 4, 2018 memo instructs federal prosecutors to follow pre-existing principles of prosecutorial discretion established in 1980 and as reflected in the U.S. Attorney's Manual, consistent with the U.S. Department of Justice’s finite resources.

In 1998, Washington voters approved Initiative 692 which permitted the use of marijuana for medical purposes by qualifying patients. Initiative Measure No. 502 (I-502) was a ballot measure approved by Washington voters in November 2012 that legalized the production, processing, possession, and personal use of marijuana. I-502 also revised provisions in criminal statute to accommodate such legalization in accordance with the requirements of the initiative.

Washington is one of at least 29 states, plus Washington D.C., that have passed legislation allowing the use of marijuana for medicinal purposes and one of eight states, plus Washington D.C., that allow its recreational use. These activities, however, remain illegal under federal law.

Summary: Financial institutions that receive deposits, extend credit, conduct fund transfers, or provide other financial services for a marijuana producer, processor, retailer, qualifying patient, health care professional, or designated provider authorized under Washington law does not commit a crime for providing those financial services.

Certified public accountants do not commit a crime solely for providing professional accounting services to licensed marijuana businesses.

Votes on Final Passage: