Pennsylvania Treasurer Joe Torsella joined counterparts from three other legal-marijuana states this week to request a meeting with U.S. Attorney General Jeff Sessions. The treasurers want to resolve conflicts between state and federal law to pave the way for banking services for cannabis growers and dispensaries.

Despite being legal in 29 states, marijuana is outlawed by the U.S. government. As a result, financial services for the multibillion-dollar cannabis industry are scant. Credit cards can't be used for purchases, federally chartered banks won't take deposits, and cannabis businesses are left struggling with mountains of cash.

Pennsylvania Treasurer Joe Torsella at his swearing-in ceremony.
Pennsylvania Treasurer Joe Torsella at his swearing-in ceremony.

"This is not just a blue-state phenomenon, but includes purple and red states in every corner of our country," said Torsella along with the treasurers of California, Illinois and Oregon in a letter to Sessions dated Thursday. "A majority of Americans now live in states where they have decided to legalize cannabis."

John Chiang, the treasurer of California and a gubernatorial candidate, proposed a state bank to serve his state's legal adult-use cannabis industry.

Sessions has been vociferously anti-marijuana. On March 20, Sessions signed a memo asking federal prosecutors to seek the death penalty for anyone "dealing in extremely large quantities of drugs." That sent chills through the community of state-legal marijuana growers and dispensary owners.

Steve Schain, an attorney in Philadelphia with the international Hoban Law Group, said until the federal government offers clarification, marijuana businesses are hobbled by difficulties faced by no other industry.

"With regards to financial services, marijuana businesses are damned if they do and damned if they don't," Schain said. "Although less than 0.03 percent of American financial institutions have even deigned to provide services to marijuana-related business, more often than not exorbitant fees are imposed, there are insurmountable waiting lists to get accounts, and due to bank mergers and acquisitions those accounts are closed at the drop of a hat."

The handful of state-chartered banks and credit unions that offer accounts charge monthly fees ranging from $5,000 to $10,000. Because they are forced to be all-cash businesses, marijuana companies are susceptible to robbery. Most pay their taxes with large stacks of cash.

Industry experts estimated that the legal marijuana industry generated $7.2 billion last year.

Pennsylvania's medical program launched in mid-February. The state Department of Health this month announced it will award a second round of permits to grow and dispense marijuana. It addition, the Keystone State will launch a first of its kind academic research program with up to eight major health systems. Bills are pending in the legislature to legalize recreational use, though passage is not likely.

New Jersey's medical marijuana program is set to expand rapidly. Garden State Gov. Murphy this week announced more qualifying medical conditions and said he would allow dispensaries to open satellite facilities. Murphy also has proposed legalizing cannabis for adult-use and regulating it like alcohol.

In January, Sessions rescinded Obama-era documents called the Cole Memoranda that had offered some assurances to state-legal businesses and banks that they wouldn't be targeted by federal agencies as long as they followed guidelines and remained transparent.

The letter to Sessions asks him to reconsider.

"There are sound public policy reasons for providing financial institutions and other entities that do business with the cannabis industry some comfort that they will not be prosecuted, or lose access to consumer assets, simply for banking this industry," the letter read. "Among the policy positives that could result are greater public safety and more efficient collection of tax revenues."

The absence of guidance "leaves the industry and financial institutions in the dark."