By Joseph Edelen

DOVER — After years of attempts to legalize recreational marijuana in the First State, Delaware’s retail market will be up and running later this year.

But, ahead of the market’s launch, lawmakers have taken initiative to protect banks in anticipation of their business with retail owners, as marijuana remains a federally scheduled substance across the nation.

House Bill 355, sponsored by Rep. Ed Osienski, D-Newark, who has been a champion of medical and recreational marijuana initiatives in the state legislature, would provide protections for financial institutions and other entities – like accounting, credit unions and armored car services – for providing services related to the marijuana market.

“Local banks and credit unions are better positioned to serve the marijuana industry because they are regulated by state law under which the state’s legal marijuana industry also operates,” Rep. Osienski said during the proposals’ March 26 hearing in the House Economic Committee. “They often have more flexibility to adjust to state changes and are more willing to meet the needs of local communities and businesses.”

The bill is supported by the state treasurer’s office, which contributed to the crafting of the legislation, Rep. Osienski said. The office worked alongside the State Bank Commissioner and the Department of Justice’s Civil and White-Collar Crimes Units in its development.

Deputy State Treasurer Jordan Seemans was called as a witness during the bill’s committee hearing, as he noted that, in states like Colorado and Washington that have recreational marijuana markets, similar legislation has been enacted to ease the burden on their respective financial institutions.

The witness also noted that, by passing such legislation, it will make tax and cash transactions more efficient for players in the industry.

“Nationwide, it’s called ‘comfort legislation’ or ‘signal legislation.’ It’s really a signal to the financial services industry, including accountants and armored-car services, that while the federal government might say it’s illegal, in the eyes of the state government, it is a purely legal service,” Mr. Seemans said.

During the discussion, lawmakers like Rep. Jeff Spiegelman, R-Clayton, and Rep. Danny Short, R-Seaford, sought clarification on certain aspects of how the legislation would apply given federal statutes.

The Clayton Republican – who expressed support for the measure - pushed back on the federal government’s inaction on marijuana, as the substance remains a Schedule 1 drug by the U.S. Drug Enforcement Administration.

According to the federal agency, drugs categorized as Schedule 1 have no “currently accepted medical use and a high potential for abuse,” though marijuana has been medicinally approved in 38 states.

“Without pieces of legislation like this, any person working in the Department of Finance in any of these states is technically money-laundering for an illegal activity,” he said. “So, unfortunately, it’s anything very, very risky thing from a financial standpoint; further proof that the federal government has just done the country wrong behind this policy, that they continue to maintain of having marijuana as a (Schedule 1) drug.”

House Bill 355 was voted out of committee unanimously on March 26 and received the full support of the House of Representatives two days later.

With its House consideration complete for the time being, the proposal has been sent to the Senate Health and Social Services Committee for further deliberation.