12 Pa.C.S. Ch. 55

in effect

12 Pa.C.S. § 5501 Scope of chapter.

This chapter relates to legitimate cannabis-related businesses.

12 Pa.C.S. § 5502 Definitions.

The following words and phrases when used in this chapter shall have the meanings given to them in this section unless the context clearly indicates otherwise: "Business associate." A person that is a customer or supplier of goods or services to or for the benefit of a legitimate cannabis-related business or an officer or director, owner, operator, shareholder, member, employee, agent or financial backer of a legitimate cannabis-related business. "Cannabis." Any substance defined as "marihuana" by section 102 of the Controlled Substances Act (Public Law 91-513, 84 Stat. 1236) or section 2 of the act of April 14, 1972 (P.L.233, No.64), known as The Controlled Substance, Drug, Device and Cosmetic Act. The term shall include hemp. "Cannabis product." A product that contains cannabis, a cannabis extract or a cannabis concentrate, including, but not limited to, edible products, beverages, topicals, ointments, oils, tinctures, capsules, pills, suppositories, inhaled products, a hemp-derived cannabinoid product or a medical marijuana product as defined in section 103 of the act of April 17, 2016 (P.L.84, No.16), known as the Medical Marijuana Act. "Depository institution." As follows: (1) a depository institution as defined in section 3(c) of the Federal Deposit Insurance Act (64 Stat. 873, 12 U.S.C. § 1811 et seq.); (2) a Federal credit union as defined in section 101 of the Federal Credit Union Act (48 Stat. 1216, 12 U.S.C. § 1751 et seq.); or (3) a State credit union as defined in section 101 of the Federal Credit Union Act. "Federal financial regulatory agency." The term includes the Federal Reserve System, the United States Treasury, the Comptroller of the Currency, the National Credit Union Administration, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission and the Consumer Financial Protection Bureau. "Financial institution." A depository institution, trust company, licensee, a person subject to the jurisdiction of a Federal financial regulatory agency or a person subject to the jurisdiction of the Department of Banking and Securities under the act of December 5, 1972 (P.L.1280, No.284), known as the Pennsylvania Securities Act of 1972. "Financial service." (1) The term includes a financial product or service: (i) as defined by section 1002 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Public Law 111-203, 12 U.S.C. § 5301 et seq.), regardless of whether the customer receiving the product or service is a consumer or a commercial entity; or (ii) permitted to be provided under the authority of: (A) a national bank or a financial subsidiary under 12 U.S.C. §§ 24 (42 Stat. 767), 24a (113 Stat. 1373) and 92a (76 Stat. 668); (B) a Federal credit union under the Federal Credit Union Act; (C) an incorporated institution under the act of November 30, 1965 (P.L.847, No.356), known as the Banking Code of 1965; (D) a credit union under 17 Pa.C.S. (relating to credit unions); (E) a person registered, or exempt from registration, to offer or sell any security, or to act as a broker, dealer, transfer agency, clearing agency or investment company under the Investment Company Act of 1940 (54 Stat. 789, 15 U.S.C. § 80a-1 et seq.); (F) a person registered, or exempt from registration, to: (I) offer or sell any security, under the Securities Act of 1933 (48 Stat. 74, 15 U.S.C. § 77a et seq.); (II) act as an exchange, a broker, dealer, transfer agent or clearing agent under the Securities Exchange Act of 1934 (48 Stat. 881, 15 U.S.C. § 78a et seq.); (III) act as an investment adviser under the Investment Advisers Act of 1940 (54 Stat. 847, 15 U.S.C. § 80b-1 et seq.); or (IV) act as an investment company under the Investment Company Act of 1940; or (G) a person acting as a broker-dealer, agent, investment adviser or investment adviser representative in this Commonwealth under the Pennsylvania Securities Act of 1972. (2) The term includes a service, whether performed directly or indirectly, authorizing, processing, clearing, settling, billing, transferring for deposit, transmitting, delivering, instructing to be delivered, reconciling, collecting or otherwise effectuating or facilitating the payments of funds, where funds payments or funds are made or transferred by any means, including by the use of credit cards, debit cards or other access devices, accounts, original or substitute checks or electronic funds transfers. "Hemp." As defined under section 297A of the Agricultural Marketing Act of 1946 (60 Stat. 1087, 7 U.S.C. § 1621 et seq.). "Insurance service." A service authorized to be provided by an insurer in this Commonwealth. "Insurer." An entity or person authorized by the Insurance Department to transact the business of insurance in this Commonwealth or designated as an eligible surplus lines insurer as defined in section 1602 of the act of May 17, 1921 (P.L.682, No.284), known as The Insurance Company Law of 1921. The term includes a person licensed by the Insurance Department to sell, solicit or negotiate insurance, and that person's officers, directors, agents and employees. "Legitimate cannabis-related business." A person that participates in any business or organized activity that involves handling cannabis or a cannabis product, including cultivating, producing, manufacturing, selling, transporting, displaying, dispensing, distributing or purchasing cannabis or a cannabis product in compliance with Federal law, the laws of this Commonwealth or a law established by another state. "Licensee." A person defined as a licensee by section 2 of the act of May 15, 1933 (P.L.565, No.111), known as the Department of Banking and Securities Code. "State." Any state, territory or possession of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, Guam, American Samoa or the United States Virgin Islands or any federally recognized Indian tribe as defined by the Secretary of the Interior under section 104(a) of the Federally Recognized Indian Tribe List Act of 1994 (Public Law 103-454, 25 U.S.C. § 479a-1). "Trust company." The term includes: (1) a national bank authorized to exercise trust powers as authorized by 12 U.S.C. § 92a; (2) a trust company as defined by section 102 of the Banking Code of 1965; or (3) an interstate bank as defined in section 102 of the Banking Code of 1965 authorized to exercise the powers of a trust company in this Commonwealth.

12 Pa.C.S. § 5503 Services to legitimate cannabis-related businesses.

(a) Authorization to provide financial services.--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 subject to: (1) the laws and regulations applicable to the provision of financial services to other customers of the financial institution; (2) any applicable consumer protection laws of this Commonwealth; (3) any additional requirements applicable to the institution established for the provision of services to a legitimate cannabis-related business or its business associates by a Federal financial regulatory agency, the Department of Banking and Securities or a financial regulatory agency of the state under which the institution is organized; and (4) the extent the institution is providing services to a legitimate cannabis-related business or its business associates in another jurisdiction, any additional requirements applicable to the institution established for the provision of the services by a financial regulatory agency of that jurisdiction. (b) Authorization to provide insurance services.--An insurer may provide insurance services to or for the benefit of a legitimate cannabis-related business and the business associates of a legitimate cannabis-related business subject to: (1) the laws and regulations applicable to the provision of insurance services to other customers of the insurer; (2) any applicable consumer protection laws of this Commonwealth; (3) any additional requirements applicable to the insurer established for the provision of services to a legitimate cannabis-related business or its business associates by the Insurance Department; and (4) the extent the insurer is providing services to a legitimate cannabis-related business or its business associates in another jurisdiction, any additional requirements applicable to the insurer established for the provision of the services by an insurance regulatory agency of that jurisdiction. (c) No requirement to provide services.--Nothing in this chapter shall require a depository institution, an entity performing a financial service for or in association with a financial institution or an insurer to provide financial or insurance services to a legitimate cannabis-related business or the business associates of a legitimate cannabis-related business or to any other business. 2022 Amendment. Section 3 of Act 56 provided that the addition of section 5503 shall apply to the provision of financial or insurance services to a legitimate cannabis-related business or a business associate of a legitimate cannabis-related business on or after the effective date of section 3. Cross References. Section 5503 is referred to in section 5504 of this title.

12 Pa.C.S. § 5504 Protections for financial institutions, insurers, legitimate cannabis-related businesses and business associates.

(a) Actions of government agencies.--No agency or political subdivision of this Commonwealth may: (1) prohibit, penalize or otherwise discourage a financial institution or insurer from providing financial or insurance services to a legitimate cannabis-related business or the business associates of a legitimate cannabis-related business; (2) recommend, incentivize or encourage a financial institution or insurer not to offer financial or insurance services to an account holder, or downgrade or cancel services provided to the account holder, solely because the account holder is a legitimate cannabis-related business or a business associate of a legitimate cannabis-related business; (3) take adverse or corrective supervisory action on a loan made to a legitimate cannabis-related business or a business associate of a legitimate cannabis-related business solely because the loan has been made to a legitimate cannabis-related business or a business associate of a legitimate cannabis-related business; (4) prohibit or penalize a financial institution or insurer performing financial or insurance services in association with another financial institution or insurer from providing financial or insurance services to a legitimate cannabis-related business or a business associate of a legitimate cannabis-related business; or (5) subject the legal interest of a financial institution in the collateral for a loan or another financial service provided to a legitimate cannabis-related business or the business associates of a legitimate cannabis-related business to civil or criminal forfeiture under any laws of this Commonwealth or initiate or participate in proceedings for the civil or criminal forfeiture of a legal interest under Federal law or under the laws of another state. (b) Enforcement authority.--Nothing in this act shall prevent the Department of Banking and Securities, the Insurance Department or the Attorney General, in a manner consistent with the requirements of section 506 of the act of May 15, 1933 (P.L.565, No.111), known as the Department of Banking and Securities Code, from undertaking an enforcement action for compliance with the requirements of section 5503(a) or (b) (relating to services to legitimate cannabis-related businesses) in a manner consistent with subsection (a). (c) Criminal prosecution and civil claims.--Subject to subsection (h), no financial institution or insurer, or the directors, officers, employees, agents, owners, shareholders or members of a financial institution or insurer, shall be subject to a criminal prosecution, sanction or claim for damages or any equitable remedy, solely because the institution or insurer is providing financial or insurance services to or for the benefit of a legitimate cannabis-related business or the business associates of a legitimate cannabis-related business. (d) Proceeds of legitimate cannabis-related business activities.--The proceeds of any transaction involving the activities of a legitimate cannabis-related business may not be considered proceeds from an unlawful activity solely because the transaction involves the proceeds from a legitimate cannabis-related business or a business associate of a legitimate cannabis-related business. (e) Rights and privileges.--No legitimate cannabis-related business, or a business associate of a legitimate cannabis-related business, shall be denied any right or privilege by a State agency solely because of the business's or business associate's lawful participation in the medical marijuana program established under the act of April 17, 2016 (P.L.84, No.16), known as the Medical Marijuana Act. (f) Limited immunity.--If a legitimate cannabis-related business fails to provide the notice required under section 5506(a) (relating to required disclosures) to a financial institution or insurer, the financial institution or insurer shall not be deemed in violation of this chapter solely because the financial institution or insurer was not notified and continued to provide services beyond the date at which such services should or could have been terminated as a result of the suspension or revocation of the permit, registration or certification. (g) Exclusion.--This chapter shall not apply to the cultivation, production, manufacture, sale, transportation, display, dispensing, distribution or purchase of cannabis for recreational use within this Commonwealth in a manner contrary to the act of April 14, 1972 (P.L.233, No.64), known as The Controlled Substance, Drug, Device and Cosmetic Act, or any actions in violation of the Medical Marijuana Act except as otherwise provided by this chapter. (h) Requirements.--The protections provided by this section to a financial institution or insurer and to the directors, officers, employees, agents, owners, shareholders or members of the institution or insurer are subject to the institution's or insurer's material compliance with the requirements of section 5503(a) and (b) and reasonable due diligence to determine that a legitimate cannabis-related business or a business associate of a legitimate cannabis-related business is in compliance with the laws of this Commonwealth and the laws of other states in which the cannabis-related business is located, or with any applicable Federal laws, which provide authorization for the operation of a legitimate cannabis-related business. 2022 Amendment. Section 3 of Act 56 provided that the addition of section 5504 shall apply to the provision of financial or insurance services to a legitimate cannabis-related business or a business associate of a legitimate cannabis-related business on or after the effective date of section 3.

12 Pa.C.S. § 5505 Access to information.

(a) Voluntary disclosures.--Section 1307 of the act of April 17, 2016 (P.L.84, No.16), known as the Medical Marijuana Act, shall not prohibit the voluntary disclosure of any records or other information by a legitimate cannabis-related business, or a business associate to a financial institution or insurer, as necessary to obtain financial or insurance services to the extent not prohibited by and consistent with any applicable requirements of the Health Insurance Portability and Accountability Act of 1996 (Public Law 104-191, 110 Stat. 1936) privacy regulation as promulgated by the United States Department of Health and Human Services under 45 CFR Pts. 160 (relating to general administrative requirements), 162 (relating to administrative requirements) and 164 (relating to security and privacy) and 16 CFR Pt. 313 (relating to privacy of consumer financial information). (b) Restrictions on use of records.--A financial institution, or insurer receiving access to information under subsection (a), the distribution of which would otherwise be prohibited, may only use the information as necessary to satisfy due diligence obligations required to provide financial or insurance services to persons participating in the medical marijuana program established under the Medical Marijuana Act and may not disclose the information records to other persons except for information: (1) required for the filing of suspicious activity reports with the United States Department of the Treasury or the investigation of related reports; (2) requested by the institution's primary regulator, the Federal Deposit Insurance Corporation or the National Credit Union Administration for the purposes of conducting an examination of the institution; (3) as necessary to respond to court orders or subpoenas after providing the person authorizing the release of the records and the institution's primary regulator the opportunity to object to the order or subpoena; or (4) as authorized by a person who is the subject of the confidential information.

12 Pa.C.S. § 5506 Required disclosures.

(a) Notification by legitimate cannabis-related business.--If a legitimate cannabis-related business obtains financial or insurance services from a financial institution or insurer doing business in this Commonwealth, the business shall, within five business days, provide notice to the financial institution or insurer if a cannabis-related permit, registration or certification held by the business or its affiliates under Federal law, the laws of this Commonwealth or a law established by another state is suspended or revoked. (b) Penalty.--If a legitimate cannabis-related business fails to give the notice required under subsection (a) to a financial institution or insurer, the business or business associate may be assessed a civil penalty up to $500 per day, not to exceed $25,000, until the notice is provided. The Department of Banking and Securities shall have authorization to assess civil penalties for failure to give notice under this section to a financial institution, and the Insurance Department shall have authorization to assess civil penalties for failure to give the notice under this section to an insurer. Cross References. Section 5506 is referred to in section 5504 of this title.

12 Pa.C.S. § 5507 Regulations and statements of policy.

The Department of Banking and Securities and the Insurance Department may adopt statements of policy or regulations to implement this chapter and to provide guidance to financial institutions and insurers providing financial or insurance services to legitimate cannabis-related businesses and business associates of a legitimate cannabis-related business.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.palegis.us/statutes/consolidated/view-statute?txtType=HTM&ttl=12Fetched: 10/16/2026