Or you can mail donations to Henry Shivley at P.O. Box 964, Chiloquin, OR 97624

Oregon Bill Would Create Banking Alternative for Cannabis Industry, Bypass Federal Reserve

Tenth Amendment Center – by Mike Maharrey

SALEM, Ore. (March 22, 2019) –  A bill filed in the Oregon House would establish limited state-chartered banks to serve the cannabis industry. Final passage of this legislation would remove a major federal roadblock in front of the developing industry in the state and further nullify federal prohibition in practice.

Rep. Pam Marsh (D) and Rep. Ken Helm (D) introduced House Bill 3169 (HB3169) on Feb. 28. The legislation would create a self-contained, state chartered banking system for the cannabis industry in Oregon. 

Because marijuana remains illegal under federal law, cannabis businesses in states that have legalized marijuana remain effectively locked out of the banking system. If a federally chartered or insured financial institution touches marijuana money, it takes on significant legal risk. The federal government insures or charters virtually every bank in the U.S. As a result, cannabis businesses have been forced to transact almost exclusively in cash. Passage of HB3169 would bypass the federal banking system and create a limited banking alternative for the marijuana industry in Oregon.

HB3619 would authorize banking institutions and credit unions to organize as limited charter cannabis financial institutions. Cannabis businesses would be able to deposit funds in these institutions and write “special purpose checks” for the following:

(a) To pay fees or taxes to a public body;
(b) To pay rent on property that is leased by, or on behalf of, a cannabis business;
(c) To pay a vendor that is physically located in Oregon for goods or services associated with a cannabis business; and
(d) To purchase bonds issued by a public body.

These checks could only be deposited or cashed at the issuing cannabis limited charter bank or credit union, or another cannabis limited charter bank or credit union that agrees to accept the check. This would keep the entire process outside of the federal checking system known as the automatic clearing house (ACH).


The Federal government has used banking laws as a weapon in its unconstitutional war on cannabis by making it impossible for marijuana businesses to access the banking system – even in states where marijuana has been legalized. The feds can prosecute bankers for knowingly engaging with cannabis businesses under the Bank Secrecy Act, the USA Patriot Act, and the Racketeer Influenced and Corrupt Organizations (RICO) Act.

The Federal Reserve has gotten into the act, denying its services to state banks chartered to serve the marijuana industry.

For instance, in 2015, the Federal Reserve Bank of Kansas City denied  Fourth Corner Credit Union’s application for a master account. The Denver based credit union was formed by Colorado’s state-licensed cannabis manufacturers as a non-profit cooperative. By denying its application, the Fed prevented the institution from access to the Fed’s payment facilities, including its check clearing, wire transfer, and ACH facilities. This made it virtually impossible for Fourth Corner to do business.

In February 2018, the Federal Reserve Bank of Kansas City finally gave conditional approval for Fourth Corner’s master account. But according to the Marijuana Business Daily, the credit union will not serve plant-touching business. It will cater to “advocacy groups, charities and ancillary companies such as accountants.”

State-chartered banks do not have to be members of the Federal Reserve system. But as it did with Fourth Corners, the Fed can deny any non-member bank or credit union access to its services. In other words, the Federal Reserve can lock any bank attempting to operate in the cannabis industry out of the broader banking system, making it impossible for them to do business with any other bank or merchant. With the passage of HB3169, Oregon could bypass the entire federal banking system and its regulations, and create a self-contained banking network for the marijuana industry.


Some marijuana businesses have circumvented the banking system by transacting in bitcoin or other cryptocurrencies. Technology companies like SinglePoint and POSaBIT have been working to generate a payment method for medical marijuana dispensaries and consumers using bitcoin.

In 2014, SinglePoint placed terminals in some medical marijuana dispensaries that allowed patients to make payments with their debit cards, but the banking system quickly shut it down.

“They were going great,” SinglePoint president Wil Ralston told CNBC. “Then overnight the banks shut them all down. There were no guidelines about how banks were supposed to interact with the cannabis industry. They didn’t want to risk it.”

Ralston started looking into cryptocurrencies. Now, SingleSeed allows dispensaries to accept bitcoin and consumers to pay with it.

Other services like BHCPLS.io are in open beta, but promise to bring Bitcoin Cash (BCH) point-of-sale systems to brick and mortar merchants, something cannabis businesses could find useful.

Some analysts believe the marijuana industry could pave the way for the wider use of cryptos. Leslie Bocskor, president of cannabis advisory and services firm Electrum Partners, told CNBC the cannabis industry may well lead the way in using bitcoin or other cryptocurrencies.

“If it finds a way to avoid the traditional banking system, other businesses would follow suit,” Bocskor said.


Under the Controlled Substances Act (CSA) passed in 1970, the federal government maintains complete prohibition of marijuana. Of course, the federal government lacks any constitutional authority to ban or regulate marijuana within the borders of a state, despite the opinion of the politically connected lawyers on the Supreme Court. If you doubt this, ask yourself why it took a constitutional amendment to institute federal alcohol prohibition.

Legalization of marijuana in Oregon removed a layer of laws prohibiting the possession and use of marijuana, something that will be extremely difficult for federal prohibitionists to overcome. FBI statistics show that law enforcement makes approximately 99 of 100 marijuana arrests under state, not federal law. By legalizing cannabis, Oregon essentially sweeps away the basis for 99 percent of marijuana arrests.

Furthermore, figures indicate it would take 40 percent of the DEA’s yearly-budget just to investigate and raid all of the dispensaries in Los Angeles – a single city in a single state. That doesn’t include the cost of prosecution. The lesson? The feds lack the resources to enforce marijuana prohibition without state assistance.


Oregon is among a growing number of states simply ignoring federal prohibition, and nullifying it in practice.

California, Colorado, Washington state and Alaska were the first states to legalize recreational cannabis, and California, Nevada, Maine and Massachusetts joined them after ballot initiatives in favor of legalization passed in November 2016. In January 2018, Vermont became the first state to legalize marijuana through a legislative act.

With 33 states, the feds find themselves in a position where they simply can’t enforce prohibition anymore.

“The lesson here is pretty straightforward. When enough people say, ‘No!’ to the federal government, and enough states pass laws backing those people up, there’s not much the feds can do to shove their so-called laws, regulations or mandates down our throats,” Boldin said.

Efforts to expand Oregon’s marijuana law demonstrates another important reality. Once a state puts laws in place legalizing marijuana, it tends to eventually expand. As the state tears down some barriers, markets develop and demand expands. That creates pressure to further relax state law.


HB3169 was referred to the House Committee on Economic Development where it is scheduled for a hearing on March 25. It will need to pass committee by a majority vote before moving forward in the legislative process.

Tenth Amendment Center

This entry was posted in News. Bookmark the permalink.

9 Responses to Oregon Bill Would Create Banking Alternative for Cannabis Industry, Bypass Federal Reserve

  1. carl hammel says:

    While that’s a step in the right direction, anyone should be “legally” able to grow on their property all the weed they desire because if that were the case there would be no need for suppliers or drug war instigated violence over such trivial matters. Much as poppy growers are able to do under c.i.a. protection since the overthrow of the Taliban after the mossad orchestrated attacks on “9/11”. Crime is what interested parties say it is and as long as they have a monopoly on the “crime” it isn’t a crime at all. The same can be said of prostitution or gambling, which I agree is a tax on fools. However much of the resultant flow of hard dope into the U.S. is facilitated by the C.I.A., often on their own aircraft and has been since WW2. Read Peter Dale Scott and Alfred McCoy since I ain’t writin’ a book and they already have.

  2. Amicus says:

    Study Shows that Bees Love Hemp, Which is Wonderful News for the Environment and the World


  3. carl hammel says:

    Free industry could reclaim manipulation of interest rates and credit expansion by federal reserve. Thank Yaweh that FDR stole the gold to improve our situation. Beofre he manipulated us into world war two after a self proclaimed second coming of Christ like Wilson screwed us into world war 1. Low class shit like you or I have never profited from any war. We’ve been stripped of our wealth, morality and freedom because of bankers wars. If you want to fight a war to end all wars, drone the City Of London. (For the uninitiated, not London proper.)

  4. carl hammel says:

    Does it ever occur to anyone that some people would smoke pot regardless of government intervention and that pot smokers are far less likely to start a war than the self proclaimed protectors of society and the defenders of freedom who actively bring at least 80% of hard drugs into this country to support their own black operations? It should occur to pot smokers and everyone else that these murderers are lying thieves and are a far greater threat to the world than pot smokers since most of them probably smoke pot themselves whenever they’re not snorting coke.

    • Katie says:

      carl, excellent comment and I agree with you!

    • Martist says:

      X1000 on all points.

    • KOYOTE says:


      • KOYOTE says:


  5. # 1 NWO Hatr says:

    Just one more damn SCAM to make even more mammon off of this aspect of the cannabis industry.

    Every bank who refuses to legitimately serve the cannabis industry just like any other business should have the SH#T SUED OUT OF THEM.

    Or have their banks burned to the ground (better option… they ALL should be anyway!)


    ……..(‘(…´…´…. ¯~/’…’)
    ……….”…\………. _.·´

Leave a Reply