Lobbyists for banks and credit unions often have complained that conflicts between state and federal laws are creating legal problems for financial institutions wanting to capitalize on cannabis-related businesses.

But now Washington finally could be getting closer to delivering protections for the banks and credit unions that work with the booming marijuana industry.

There is a 75% chance of “banking clarity” for cannabis companies in the current session of Congress, said Isaac Boltansky, director of policy research for Compass Point Research and Trading, in a recent note.

Other experts say the chances for an actual cannabis-banking law are below that level, but still decent.

“The conditions are as good as they’ve ever been for legislation to proceed,” said Ryan Donovan, chief advocacy officer for the Credit Union National Association, a trade group that lobbies for credit unions. “75% may be a little high, but [the odds] are better than they were in the last Congress.”

The odds-making comes amid a House Financial Services subcommittee hearing on Wednesday that covered the challenges that cannabis-related businesses face in getting access to banking services.

Read Cannabis Watch:Marijuana stocks climb ahead of congressional hearing on banking

“This hearing is part of an effort to try to generate some momentum in the House of Representatives,” Donovan said. Prospects for cannabis-banking legislation “might be easier to see once we get past the shutdown threat and get into more of a normal legislative environment,” he added.

A bipartisan group of House members is aiming to introduce a bill in the new session that would — as a draft version of the measure puts its — “create protections for depository institutions that provide financial services to cannabis-related legitimate businesses.” The draft is posted on the House Financial Services Committee’s website. The legislation’s backers are Colorado Democratic Rep. Ed Perlmutter, Washington Democratic Rep. Denny Heck and two Ohio Republicans, Steve Stivers and Warren Davidson.

Perlmutter and Heck have rolled out similar legislation in prior years that failed to get traction. In the Senate, Oregon Democratic Sen. Jeff Merkley has sponsored companion legislation, and GOP Sen. Cory Gardner of Colorado made an unsuccessful push last year to attach a marijuana banking amendment to the criminal justice bill.

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Analysts have said cannabis-banking legislation could run into trouble in the Senate, given Majority Leader Mitch McConnell’s wary stance toward weed. Last year, the Kentucky Republican applauded a farm bill that legalized industrial hemp, but he described marijuana as hemp’s “illicit cousin which I choose not to embrace.”

The problematic conflicts between state and federal laws arise as a growing number of states have made it legal to use marijuana for medical or recreational purposes. When financial institutions aiming to serve cannabis-related businesses can’t do so, these businesses end up operating largely in cash, and that leads to public-safety risks, lobbyists say. In other words, robberies and other crimes become more likely to happen. Experts testifying at Wednesday’s hearing highlighted crimes such as the 2016 killing of a Colorado pot dispensary’s security guard during an attempted robbery.

“The safety of thousands of employees, business owners, security personnel, police officers and community members is in your hands,” Neill Franklin, the Law Enforcement Action Partnership’s executive director, told the subcommittee on consumer protection and financial institutions. LEAP is a nonprofit known for opposing the “war on drugs.”

The subcommittee also was told Wednesday that people tied to the cannabis industry can’t build credit when they operate primarily in cash, and taxes can’t be collected correctly.

The draft legislation drew some flak during the hearing, with the criticism coming from Jonathan Talcott, chairman of anti-legalization nonprofit Smart Approaches to Marijuana, and Missouri Republican Rep. Blaine Luetkemeyer, the subcommittee’s ranking member.

“You really need to address the Controlled Substances Act and its prohibition on marijuana ... before any of the proposed changes and safe harbors would be effective,” Talcott said in his testimony. Luetkemeyer made a similar point, saying lawmakers were “dealing with an illegal industry at the federal level” and “putting the cart before the horse” by focusing on the industry’s banking needs.

Pot stocks largely advanced Wednesday. The ETFMG Alternative Harvest ETF MJ, +2.21% , which tracks a basket of such stocks, closed higher by 1.5%, while the S&P 500 SPX, +1.05% was up by 0.3%. In the past 12 months, the marijuana ETF has gained 7.9%, while the S&P has tacked on 3.4%.

Now read:How marijuana companies can profit without selling pot

This report was first published on Feb. 13, 2019.