HARRISBURG, Pa. (April 14, 2022) – Yesterday, the Pennsylvania Senate passed a bill to provide medical marijuana businesses better access to banking and insurance services. The enactment of this legislation would remove a roadblock in front of the developing industry in the state and further nullify federal prohibition in practice.

Sen. John DiSanto (R) and Sen. Sharif Street (D), along with a large bipartisan coalition of senators, introduced Senate Bill 1167 (SB1167) on March 25. The legislation would safeguard banks and insurers working with medical marijuana businesses in the state from penalties imposed by state regulators. Under the proposed law, a “financial institution authorized to engage in business in this Commonwealth may provide financial services to or for the benefit of a legitimate cannabis-related business and the business associates of a legitimate cannabis-related business.” The bill would provide the same protections for insurance companies.

The bill would also prohibit state agencies from recommending, incentivizing, or encouraging a financial institution or insurer to not provide services just because a business is associated with marijuana. State agencies would also be banned from taking adverse or corrective supervisory action on a loan made to a legitimate cannabis-related business.

On April 13, the Senate passed SB1167 by a 46-3 vote.

The bill is intended to allay fears that banks will be prosecuted or penalized for taking in marijuana-related accounts. 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.

While the enactment of SB1167 would not stop potential federal prosecution of a financial institution engaging in the medical marijuana business, it would eliminate the fear of state prosecution. Federal authorities depend on state cooperation to enforce virtually all of their laws. Without state cooperation, it is less likely banks will face prosecution.

According to Marijuana Moment, “This effort is yet another example of how states are working to provide financial protections to institutions that are willing to service the cannabis market as Congress continues to stall on a federal fix.”

Marijuana Moment also notes that the passage of this legislation would add pressure on congressional lawmakers to enact federal banking reforms. The bipartisan Secure and Fair Enforcement (SAFE) Banking Act has passed the House in some form six times, only to stall in the Senate.


Under the federal Controlled Substances Act (CSA) passed in 1970, the federal government maintains a complete prohibition of marijuana. Of course, the federal government lacks any constitutional authority to ban or regulate cannabis 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.

Pennsylvania legalized medical marijuana in 2016. This removed one layer of laws prohibiting the possession and use of marijuana in the state even though federal prohibition remains in effect. This is significant because FBI statistics show that law enforcement makes approximately 99 of 100 marijuana arrests under state, not federal law. When states stop enforcing marijuana laws, they sweep away most of 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.


Colorado, Washington state, Oregon 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. Michigan followed suit when voters legalized cannabis for general use in 2018. Vermont became the first state to legalize marijuana through a legislative act in 2018. Illinois followed suit in 2019. New Jersey, Montana and Arizona all legalized recreational marijuana through ballot measures in the 2020 election. Earlier this year, New YorkNew MexicoVirginia and Connecticut legalized marijuana through legislative action.

With 37 states allowing cannabis for medical use, and 18 legalizing for adult recreational use, the feds find themselves in a position where they simply can’t enforce prohibition anymore.

The lesson here is pretty straightforward. As Tenth Amendment Center Executive Director Michael Boldin noted, “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.


SB1167 will now move to the House for further consideration. At the time of this report, the bill had not been referred to a House committee. Once it receives a committee assignment, it must get a hearing and pass by a majority vote before moving forward in the legislative process.

Mike Maharrey

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