There has been some negative news coming from South Dakota. However, the House of Representatives is striving to make sure businesses and banks are protected and taken care of. Both voter approved Amendment A and IM 26 are being contested and pushed back respectively. This has made it seem like lawmakers don’t support the citizens who voted to represent them in the first place. But a new bill is improving small measures. Lawmakers are striving forward with what their citizens want.
Banking Bill
House Bill 1203 saw introduction at the beginning of February and referred to the House Commerce and Energy Committee. HB 1203 involves banks conducting business with companies that have licenses to grow, produce, distribute, transport, and sell industrial hemp products legally. This is a huge step forward as marijuana legalization has been a huge step back for the state since November’s general election.
Not only would banks conduct business with licensees, it would also allow banks to work with associated businesses. For example, banks could now work with energy companies and water companies who supply lighting and water to licensed hemp companies.
Restrictions
It almost seems backwards this restriction passed in the first place. But cannabis is still a Schedule I drug by the DEA. Industrial hemp only became federally legal in 2018 by the USDA’s Farm Bill. Banks are subject to certain federal regulations, including making business partnerships with companies that didn’t always follow the law. If banks conducted business with an ‘illegal’ organization, they could risk losing the bank as a whole, not just the branch conducting business.
Knowing banks are protected under the state law is a step forward for companies and individuals planning on applying for a cannabis license. IM 26 will hopefully be implemented in about a year and the same can be said for Amendment A.
Future
The House Commerce and Energy Committee approved HB 1203C, an amended version of the bill, with a vote of 13-0. The bill then moved to the House chamber for a full vote of 64-4. HB 1203C now goes to the Senate for further discussion and possible amendments before Governor Noem’s desk.
It is unclear how the Senate and the Governor will react to this bill. But as more information becomes available, we will be sure to update you with the latest.
Make sure to check back for more cannabis and hemp related news.