Attorneys general from 33 states and five federal territories called for passage of a bill pending in the U.S. Congress that would allow legal cannabis businesses access to the banking industry. In a letter sent to congressional leaders on Wednesday, the National Association of Attorneys General called for the approval of the Secure and Fair Enforcement Banking Act, also known as the SAFE Banking Act.
“Our banking system must be flexible enough to address the needs of businesses in the various states and territories, with state and territorial input, while protecting the interests of the federal government,” the letter reads. “This includes a banking system for marijuana-related businesses that is both responsive and effective in meeting the demands of our economy,”
The SAFE Banking Act was introduced in March by Democratic Rep. Ed Perlmutter of Colorado and approved by the House Financial Services Committee later that month. Due to federal drug and money laundering regulations, even cannabis businesses operating legally under state laws are often unable to obtain financial services regularly used by other industries. Consequently, companies in the cannabis industry often do business only in cash, putting the firms and their employees at substantial risk. The SAFE Banking Act would protect financial institutions who do business with legal cannabis businesses and likely make more banks willing to serve the industry.
Restrictions Make Regulation Difficult
The letter, which was signed by a bipartisan group of the nation’s top prosecutors, noted that current restrictions make regulation of the legal cannabis industry more difficult.
“The resulting grey market makes it more difficult to track revenues for taxation and regulatory compliance purposes, contributes to a public safety threat as cash-intensive businesses are often targets for criminal activity, and prevents proper tracking of billions in finances across the nation,” the attorneys general wrote.
Xavier Becerra, the attorney general for California, the nation’s largest legal pot market, said in a statement that the bill “would reward taxpayers and small and local licensed businesses who play by the rules,” and support economic development.
“This is simple: not incorporating an $8.3 billion industry into our banking system is hurting our public safety and economy,” said Becerra.
The letter was signed by the attorneys general for Alaska, Arizona, Arkansas, California Connecticut, Colorado, Delaware, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Utah, Vermont, Virginia, Washington, West Virginia, and Wisconsin.
It was also signed by attorneys general from five other jurisdictions including the District of Columbia, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands.
The SAFE Banking Act (H.R. 1595) is currently pending before the House Subcommittee on Crime, Terrorism, and Homeland Security. The bill has so far garnered 175 cosponsors in the House of Representatives, which represents more than 40 percent of the votes needed to pass in that body.