Marijuana and hemp-related businesses will gain access to South Dakota banks, pending a signature from Gov. Kristi Noem.
Senators approved House Bill 1203 Monday afternoon, which proactively lays groundwork for banks and their subsidiaries to work with any person that acquires an industrial hemp or marijuana license, if leg at the state level. The legislation passed with 33 votes in favor and two opposed.
“There’s no way of telling where revenues were derived from or where they’re going, if it’s a cash business,” Sen. Michael Diedrich, R-Rapid City, said in reference to banks not being allowed to engage with cannabis-related businesses, noting that they’d have to pay their taxes and utilities with paper money. “It provides for some security and protection for customers and the banking industry.”
According to the American Bankers Association, banks that work with cannabis-related businesses expose themselves to significant risk. Marijuana is still illegal at the federal level, which means that any contact with money related to marijuana operations could be considered money laundering and expose banks to significant legal, operational and regulatory risks. [Read more at Sioux Falls Argus Leader]