As the “debanking” debate roils Washington, cannabis executives – including the CEO of Florida-based Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) Kim Rivers are leveraging political connections to reframe the struggle as partisan persecution – despite federal law remaining the root cause.

Bank of America kicked off the “debanking” debate last week after President Donald Trump accused major lenders, including BofA, of shunning conservatives during a virtual interview at the World Economic Forum. The bank promptly went to social media to rebuff claims it holds bias toward Americans who disagree with Democrats.

“We would never close accounts for political reasons and don’t have a political litmus test,” BofA posted on X (formerly Twitter).

Rivers fired back on X, “Except you literally did this to me after banking with you for over 20 years all because I am the CEO of a state-legal, licensed cannabis company that employs 6,000 Americans!”

The back-and-forth comes even as federal data recently revealed that marijuana-related bank account closures have hit record highs over the past year, with little explanation as to exactly why.

‘We simply can’t follow the law’

Data from the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) shows cannabis-related account terminations surged a record 80% year-over-year to 3,307 in the second quarter of 2024, according to CRB Monitor.

Meanwhile, suspicious activity reports (SARs) – which are commonly filed by banks after large cash deposits by marijuana business owners – also spiked to 22,448. Firms filed the most marijuana-related SARs in the first quarter of 2024 versus any prior quarter in the last decade, CRB Monitor found. South Dakota, which recently expanded medical cannabis access, saw SARs skyrocket 200% to 1,851 in the same period, for instance.

While Rivers framed the move by BofA as retaliation, it’s actually federal marijuana prohibition – not partisan motives – that ultimately forces banks to sever ties with cannabis firms, financial executives have asserted in recent days.

JPMorgan Chase CEO Jamie Dimon last week spoke on big banks’ reluctance with cannabis during a company podcast appearance, and said, “We don’t bank marijuana companies because there’s no federal law around it. We simply can’t follow the law.”

Financial institutions are subjected to stringent anti-money laundering scrutiny whenever they deal with cannabis companies, due to marijuana’s Schedule I status, Dimon noted. The SAFER Banking Act, which passed the Senate Banking Committee last year and would protect financial institutions that do serve the marijuana sector, is languishing amid partisan gridlock on Capitol Hill.

Dimon added that institutions risk “hundreds of millions of dollars in fines” for non-compliance with the Bank Secrecy Act, which mandates rigorous monitoring of industries deemed high-risk, including cannabis.

“When we report stuff to the federal government, you should probably know about it, and there should be far cleaner lines about what we have to do and what we don’t have to do or things like that. So, we’ve been complaining about this for years. We need to fix it,” Dimon said.

BofA reiterated that stance, and told Banking Dive that account closures are driven by “extensive government rules” rather than ideology.

A BofA spokesperson also said decisions are based on factors like “expected activity on the account” or failure to verify documentation – standards that disproportionately impact cannabis firms operating in legal gray areas.

Dimon’s comments followed allegations from venture capitalist Marc Andreessen that banks are systematically “debanking” politically disfavored individuals and industries during an appearance on a podcast by conservative Joe Rogan. While Andreessen focused on crypto firms and conservative figures, cannabis executives like Rivers are starting to adopt the same line of attack against financial institutions.

House Financial Services Committee Chair Rep. French Hill, an Arkansas Republican, has scheduled a pair of congressional hearings, titled “Operation Choke Point 2.0” and “Making Community Banking Great Again,” next week to focus on the debanking allegations. It’s up in the air whether cannabis will come up much, if at all. Talks around crypto are set to take center stage, especially as new Chinese innovations threaten to pop the U.S. artificial intelligence tech bubble.

Political gambit?

Behind the scenes, executives such as Rivers, Cresco Labs CEO Charlie Bachtell (OTC: CRLBF) (CSE: CL) and Curaleaf (OTC: CURLF) (TSX: CURA) CEO Boris Jordan court Trump and his team to advance cannabis industry interests.

Rivers paid to attend the president’s inauguration events last week, posting on X about “great conversations” regarding rescheduling and banking reform “as we peacefully transition to a new administration.” Bachtell also paid to attend.

Trulieve, which bankrolled Florida’s failed recreational legalization bid last year, works with lobbying firm Ballard Partners, where former Florida Attorney General Pam Bondi has served as a lobbyist since 2019, though Bondi isn’t listed on Trulieve’s account, MJBizDaily reported.

Bondi was Trump’s lawyer during his first impeachment trial in 2020 and is currently his nominee for U.S. Attorney General. As such, many marijuana industry insiders are now hoping her confirmation could influence the stalled DEA rescheduling process, which is delayed indefinitely after hearings were paused in January.

However, Rivers’ optimism hinges on Trump’s follow-through. The president endorsed rescheduling and banking access for cannabis companies during his campaign last September, but mum’s been the word since then.

Trump’s administration’s DEA pick, interim chief Derek Maltz, is a rescheduling skeptic, dimming even more hopes for swift federal reform. The largest Congressional GOP faction, the Republican Study Committee, has an entire manifesto that essentially calls for a renewed war on drugs.

While Rivers’ political maneuvering points to some of the cannabis industry’s desperation, federal reform not bound by backroom favors will likely require bipartisan compromise, not partisan alliances. Only time will tell if Rivers’ and Jordan’s attempts will bear fruit.