Billionaire presidential candidate Tom Steyer says he can’t finance businesses in the cannabis industry because federal prohibition laws are out of date with current legislation.

The former hedge fund manager, who has been put forward as a Democratic rival to Donald Trump for the 2020 elections, founded a social justice-focused community bank but says it is prevented from assisting cannabis businesses.

Steyer has revealed he’s a supporter of full legalisation of marijuana but says the US can’t possibly reach that conclusion without first resolving banking issues which hinder the ability to provide financial support to marijuana entrepreneurs.

“As long as there is federal deposit insurance and it is illegal according to federal law to sell either medical or recreational marijuana, it’s impossible for a bank to finance marijuana businesses and get federal deposit insurance,” he told the Los Angeles Sun.

“I know that because my wife and I started a community bank that is dedicated to the idea of economic justice, environmental sustainability and women and minority-owned businesses.

Lose support

“We know that for us to actually finance marijuana businesses would mean that we would lose the support of the Federal Deposit Insurance Corporation (FDIC).

“So, the real question is, don’t we have to change the federal laws so that the FDIC can allow community banks and other banks to support these legal industries in the states where they exist?”

A bank protection bill was given approval by the House Financial Services Committee earlier this year, and the legislation was raised during a recent Senate Banking Committee meeting. The bill, which would allow banks to properly service the marijuana industry, appears to have stalled.

However, SBC chairmain Mike Crapo did comment earlier this week that it was time to “move forward and see if there’s some way we can draft legislation” despite previously being wholly against holding a hearing while cannabis was considered federally illegal.