TALLAHASSEE, Fla. – Democratic agriculture-commissioner candidate Nikki Fried and other state Cabinet candidates from both parties want to see federal banking changes that could lead to Florida financial institutions being open to people and businesses with ties to the medical-marijuana industry.
But Fried’s proposal for a state-created bank to handle the burgeoning industry’s money has little support from other candidates who may be part of the next Cabinet.
Fried, an attorney and medical-marijuana lobbyist from Fort Lauderdale, has made revamping regulations about the cannabis industry and banking a high-profile issue because of difficulties she has had in securing a bank for her campaign account.
Fried said as a Cabinet member she would lobby the federal government to enact laws that would protect banks that handle money tied to marijuana. She also would advocate that the state’s top financial regulator, who is overseen by the Cabinet, maintain an “open door” policy for banks handling marijuana money. Also, she said she would urge fellow Cabinet members to charter a bank that could handle the money.
“We can start a state bank. That is something I have been proposing as well, a national state-bank that is controlled by the Cabinet that we can take dollars from companies and have it housed in one location,” Fried said during a conference call last week in which she was joined by former Gov. and Congressman Charlie Crist, D-Fla.
Fried said a state-backed back would be better positioned for Florida lawmakers to provide defense from “any actions on the federal level.”
Fried’s call came as twice in the past two months her campaign account been bumped from national banks, first by Wells Fargo, then by BB&T.
Florida voters in 2016 approved a constitutional amendment that broadly legalized medical marijuana. While Florida is one of about 30 states with such legalization, cannabis remains illegal on the federal level. As a result, financial institutions have been reluctant to put themselves into a position where they can be accused of laundering drug money.
“These banks are placing limits on access to medical marijuana and limits on the care Floridians can receive,” Fried argued.
Fried’s Republican opponent for agriculture commissioner, state Rep. Matt Caldwell of North Fort Myers, has a different plan to address medical-marijuana issues.
Caldwell wants to move the Office of Medical Marijuana Use from the Florida Department of Health to the Department of Agriculture and Consumer Services. The winner of the Caldwell-Fried race in November will head the Department of Agriculture and Consumer Services for the next four years.
“I am advocating for the largest role possible for the commissioner in order to see the medical cannabis program instituted and developed consistent with the law and Florida Constitution,” Caldwell said.
Asked about the state establishing a bank to handle the interests of businesses tied to medical marijuana, Caldwell said businesses have been using state-chartered banks “to solve this challenge in the free market.” Private banks can be state chartered or federally chartered.
Caldwell also said he would continue to support a proposal by Congressman Matt Gaetz, a Republican from Fort Walton Beach, that would “down-schedule cannabis” which is now considered by the federal government like heroin and cocaine.
“This would also ease the challenges for outside industries, such as banking,” Caldwell said.
Democrat Jeremy Ring, a former state senator running for state chief financial officer, was the only major-party Cabinet candidate who backed Fried in setting up a state-chartered bank to handle medical-marijuana money. However, Ring would place a caveat on how the financial institution is run.
“As long as it serves as a depository institution, solely, then yes, the Cabinet should consider establishing a state-chartered bank,” Ring said. A depository institution could be a commercial bank, while examples of non-depository institutions could include such things as securities firms.
Ring also backed Fried in establishing new rules for the state Office of Financial Regulation to help medical-marijuana businesses.
“Sooner or later, the federal government will have to either change the classification of marijuana, legalize it in some capacity or go after more than half of the nation,” Ring said. “Until that point, I do believe that states do have a role in assisting businesses, particularly here in Florida where over 70 percent of voters backed the legalization of medical marijuana.”
“At the end of the day, elected officials work for the taxpayers and have a responsibility to implement the will of the people,” Ring continued. “With that said, the CFO has a very particular role to play in this in its capacity as part of the (state) Financial Services Commission --- specifically the Office of Financial Regulation --- which has regulatory oversight of Florida's financial services industry.”
The campaign of incumbent Chief Financial Officer Jimmy Patronis, a Republican from Panama City, said the state has been seeking to clear up federal banking rules.
“The CFO’s office sent a letter to the Federal Reserve earlier this year which asked for clarification and guidance on how to best handle the lack of banking options for medical marijuana companies because he was concerned about crimes, theft and the safety of those who are managing the funds associated with those businesses,” Patronis campaign spokeswoman Katie Strickland said in an email.
Attorney-general candidates Ashley Moody, a Republican from Hillsborough County, and Sean Shaw, a Democratic state representative from Tampa, favor working with the federal government to clear up the conflicts in state and federal law.
“The resulting banking issues faced by the medical marijuana industry were known prior to the passage of the amendment and resulting legislation,” Moody said. “The challenges will continue to exist until Congress modifies existing federal law. Unless that happens, there is unlikely anything the state or Cabinet can do to ameliorate these banking issues as even specially chartered banks would still be subject to federal banking regulation and money-laundering laws and reporting requirements.”
She added that Congress needs to codify “a safe harbor to existing banking laws” so the marijuana industry, where legal, can have access to a strictly controlled banking system.
“Continuing to force the industry to operate solely in cash will invite criminal enterprise and jeopardize the safety of employees,” Moody said.
Shaw said he will support the will of the voters but added that the greatest “confusion and instability” is the “federal government's failure to give clear guidance as to how they will enforce federal marijuana laws.”
“It is well past time for the federal government to clear up the inconsistencies between state and federal law and allow the state of Florida to benefit from the same type of new revenue streams that states such as Colorado and California have been afforded,” Shaw said.