Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa Bay news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Charlotte news in your inbox

Catch up on the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!
Expand chart
Adapted from a Financial Crimes Enforcement Network report; Chart: Axios Visuals

More banks and credit unions are offering checking and savings accounts, wire transfer services, and even loans to marijuana companies — and, so far, regulators have been watchful but accepting.

What's going on: Since marijuana is considered a criminal substance under federal law, banks that handle marijuana-linked money risk of being charged with money laundering. So they charge high fees for the privilege.

The Treasury Department's Financial Crimes Enforcement Network — FinCEN — tracks banks that serve what it calls MRBs (marijuana-related businesses).

  • Banks that do serve pot businesses — after completing due diligence to make sure a company isn't involved in illicit activity —must keep tabs on every single transaction and report customer activity to regulators.
  • Banks pass on the cost of all that paperwork — in theory, charging these customers whatever they want.
  • If a regulator says the bank isn't being thorough enough, fines can be levied.
  • Even so, there are still few options for marijuana companies that need a place to store cash, pay bills and so forth.

What we're hearing: "A cannabis operator can count on [paying] several thousand dollars a month in banking fees. It'd probably be in the hundreds of dollars for [a non-cannabis] company," Chris Call, CEO of North Bay Credit Union, which offers banking services for marijuana companies, tells Axios.

What to watch: The SAFE Banking Act — a bill in Congress that would shield banks from federal penalties for serving marijuana business customers — is gaining momentum. But in the meantime, states are trying to take matters into their own hands.

  • Nevada is testing a Venmo-like system that would allow marijuana businesses to transfer money.
  • California lawmakers are mulling a bill that would create state-sponsored, marijuana-friendly banks.

Higher taxes: Not only do marijuana companies pay higher banking fees, the illegality of marijuana means they pay more in federal taxes.

  • One tax regulation prevents most cannabis companies from deducting the business expenses that non-marijuana companies can.
  • One study found that the effective tax rate of MRBs was more than double the rate paid by “similarly situated” non-marijuana businesses.

Bonus: Cannabis companies don’t get a charitable deduction for any gifts they make. And charities are wary about accepting money from weed-affiliated businesses.

Go deeper:

Go deeper

Senate confirms retired Gen. Lloyd Austin as defense secretary

Photo: Greg Nash-Pool/Getty Images

The Senate voted 93-2 on Friday to confirm retired Gen. Lloyd Austin as secretary of defense. Sens. Mike Lee (R-Utah) and Josh Hawley (R-Mo.) were the sole "no" votes.

Why it matters: Austin is the first Black American to lead the Pentagon and President Biden's second Cabinet nominee to be confirmed.

House will transmit article of impeachment to Senate on Monday, Schumer says

Photo: Drew Angerer/Getty Images

Senate Majority Leader Chuck Schumer (D-N.Y.) announced that the House will deliver the article of impeachment against former President Trump for "incitement of insurrection" on Monday.

Why it matters: The Senate is required to begin the impeachment trial at 1pm the day after the article is transmitted.

Dan Primack, author of Pro Rata
2 hours ago - Politics & Policy

Private equity bets on delayed tax reform in Biden administration

Illustration: Brendan Lynch/Axios

In normal times, private equity would be nervous about Democratic Party control of both the White House and Congress. But in pandemic-consumed 2021, the industry seems sanguine.

Driving the news: Industry executives and lobbyists paid very close attention to Treasury Secretary nominee Janet Yellen's confirmation hearings this week, and came away convinced that tax reform isn't on the near-term agenda.

You’ve caught up. Now what?

Sign up for Mike Allen’s daily Axios AM and PM newsletters to get smarter, faster on the news that matters.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!