Relates to sharing information obtained from applicants and licensees and requesting financial institutions for the purpose of consideration and compliance.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A7388
SPONSOR: Peoples-Stokes
 
TITLE OF BILL:
An act to amend the cannabis law, in relation to sharing information
obtained from applicants and licensees
 
PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this bill is to assist cannabis licensees and applicants
navigate the banking systems by allowing the sharing of information
between the Office of Cannabis Management and financial institutions.
 
SUMMARY OF PROVISIONS:
Section one authorizes the Office of Cannabis Management to share licen-
see and applicant information with requesting financial institutions,
upon consent of the licensee or applicant.
Section two provides an immediate effective date.
 
JUSTIFICATION:
Federal scheduling of cannabis creates challenges to banking licensed
cannabis companies. Due to rigorous federal compliance rules and anti-
money laundering laws, financial institutions face increased costs and
little to no incentive to take on cannabis businesses as clients. A
financial institution servicing a cannabis business must make a suspi-
cious activity report for every transaction the client makes with the
bank. The costly burden imposed by additional compliance and reporting
measures prevents most financial institutions from banking cannabis
companies, even if they want to.
This legislation authorizes the Office of Cannabis Management to
disclose information about licensees and applicants to financial insti-
tutions requesting information upon consent of the licensee or appli-
cant. This will allow financial institutions to have access to verify
personal and financial information for their prospective cannabis
clients. It will improve the 'Know Your Customer' compliance and make it
easier and less costly for financial institutions who want to bank
cannabis businesses to comply with the federal reporting.
Access to financial services is not just an economic issue, it also
impacts public safety. Cash businesses are more readily exploited for
money laundering and other nefarious purposes, which undermines the
public policy goal of creating safe, legal and regulated markets. Addi-
tionally, it creates personal safety risks for the cannabis workers
handling the large amounts of cash. This legislation furthers the social
equity goals set in the MRTA by removing some of the financial and
systemic barriers that can prevent individuals from participating in the
market safely.
 
PRIOR LEGISLATIVE HISTORY:
This is a new bill.
 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None.  
EFFECTIVE DATE:
Immediately.
STATE OF NEW YORK
________________________________________________________________________
7388
2023-2024 Regular Sessions
IN ASSEMBLY
May 19, 2023
___________
Introduced by M. of A. PEOPLES-STOKES -- read once and referred to the
Committee on Banks
AN ACT to amend the cannabis law, in relation to sharing information
obtained from applicants and licensees
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 11 of the cannabis law is amended by adding a new
2 subdivision 16 to read as follows:
3 16. To share any and all information obtained from applicants and
4 licensees, as defined in section three of this chapter, to requesting
5 financial institutions for the purpose of consideration and compliance,
6 with the consent of such applicants and licensees.
7 § 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD02681-05-3