PIERRE, S.D. (KELO) — State representatives gave nearly unanimous support Monday to allowing South Dakota-chartered banks to conduct transactions with businesses that have state licenses for marijuana and industrial hemp.
The 64-4 vote in the House sends HB 1203 to the Senate for further consideration. The prime sponsor, Republican Representative Hugh Bartels, was the only one to speak on it. He a retired community banker from Watertown.
It also would allow banks to decide whether to serve businesses that perform work for those license holders, such as an electrical contractor for a grow facility.
If the legislation passes, each bank would still have to decide whether to proceed with what Bartels described as “the extraordinary compliance issues” that are required at the federal level. “This is just the first step,” he said.
Banks would need to conduct higher scrutiny of marijuana businesses under a federal policy. The federal government still considers marijuana to be illegal. The marijuana industry had long relied on cash.
South Dakota voters approved two marijuana-legalization measures in the November 3 election.
Bartels told a House committee last week that banking the marijuana industry is probably the key to it functioning well in South Dakota. Bartels, who has COVID-19, participated remotely in the hearing. He did so again Monday.