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U.S. Treasury Secretary Janet Yellen, speaking on Thursday, expressed support for legislative measures aimed at resolving the conflict between federal and state laws concerning marijuana sales and usage, which presently hinder access to banking services for cannabis companies. 

During a hearing of the U.S. House of Representatives Appropriations subcommittee addressing the issue, which forces cannabis businesses to rely heavily on cash transactions, Yellen remarked, “I think it’s a real problem and it would be desirable to have legislation that alleviated this problem.” 

Republican Representative David Joyce noted that he had previously raised this issue with former Treasury Secretary Steven Mnuchin five years ago, with little progress since then. 

While 38 states have legalized marijuana for medical use and 24 for recreational purposes, federal laws still prohibit cannabis sales, leading most banks to avoid involvement due to concerns about violating anti-money laundering regulations. Consequently, cannabis companies are forced to operate primarily in cash, posing security risks for employees and complicating financing. 

Yellen reiterated that this situation also hampers tax collection from cannabis firms. “I think we would potentially welcome legislation in this area that would clarify for banks what their responsibilities are,” she stated in response to Joyce’s inquiry. 

She further emphasized the inhibiting effect of federal marijuana prohibition on banks’ willingness to provide services to cannabis firms, acknowledging the array of associated challenges. 

Yellen refrained from specifying key provisions required in such legislation or commenting on a measure proposed by the U.S. Senate Banking Committee last year aimed at expanding the industry’s access to traditional banking services. 

“I think legislation may be necessary to raise the comfort level that banks have in doing this business,” she asserted. 

Democratic Representative Steny Hoyer pledged support for Yellen and her Republican colleagues in passing such legislation, citing the risks posed to businesses and employees by the current regulatory landscape. 

“I am neither a user nor a suggester of using. The fact of the matter is every state that voted on it has made it legal. Every state,” Hoyer affirmed. 

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