A bipartisan group of twenty-one state governors sent a letter to congressional leaders on Monday urging lawmakers to support a bill that would allow legal cannabis businesses to have access to traditional banking services. The measure, titled the Secure and Fair Enforcement (SAFE) Banking Act, was approved by the House of Representatives on Monday this week and now heads to the Senate for further consideration.
Prior to the vote in the House, 18 Democratic governors were joined by three of their Republican colleagues calling on Congress to support the measure, noting that federal regulations make obtaining common banking services such as payroll and checking accounts nearly impossible.
“Because few banks and credit unions provide these services, state-licensed cannabis businesses predominantly operate on a cash basis,” the governors wrote in the letter. “Without banking services, state-licensed cannabis businesses are unable to write checks, make and receive electronic payments, utilize a payroll provider, or accept credit and debit cards.”
The governors noted that the lack of access to financial services results in a cannabis industry largely fueled by cash, negatively impacting public services while making marijuana businesses particularly vulnerable to crimes including robbery, theft, and corruption.
“Cash only businesses pose a significant public safety risk to customers and employees,” the governors continued. “The cash-only environment also burdens state and local government agencies that must collect tax and fee payments in person and in cash, which creates additional public expenses and employee safety risks.”
Green Wave Of Legalization Continues Beyond the SAFE Banking Act
The bipartisan group of governors also noted that 36 U.S. states, four U.S. territories, and the District of Columbia have legalized the medical use of cannabis, and 18 states, two territories, and D.C. have pass laws legalizing the recreational use of cannabis by adults. The state leaders encouraged lawmakers in Congress to pass laws authorizing banking services for licensed cannabis businesses.
“We urge you to pass the SAFE Banking Act of 2021 or similar legislation that would provide a safe harbor for depository institutions that provide a financial product or service to a state-licensed cannabis business in states that have legalized cannabis,” the governors concluded in their letter.
Among the state leaders signing the letter to lawmakers was Democratic Gov. Gretchen Whitmer of Michigan, who said it is time for the nation’s laws to reflect the wave of legalization sweeping across state, territorial, and tribal governments.
“Although legalization continues rolling on nationwide, we still have federal laws on the books that prohibit financial institutions from working with marijuana businesses legally under state law,” Whitmer said in a press statement. “To be blunt, legalization is great for the economy: it creates jobs and boosts tax revenue that can go towards our schools, communities, and first responders. This legislation ensures that Michigan’s marijuana businesses can grow and access the same resources that all legal businesses can.”
Democratic Gov. Jared Polis of Colorado, where voters legalized medical marijuana in 2000 and then adult-use cannabis in 2012, also signed the letter calling for the passage of the SAFE Banking Act. In a press release, he urged lawmakers “to make the common sense decision to allow state-licensed cannabis-related businesses to have normal bank accounts.”
“For more than a decade, Colorado has been a model of the success of these businesses and it’s well past time that we allow them to join our banking system,” said Governor Polis.
The SAFE Banking Act was passed by the House of Representatives on Monday, the eve of the cannabis community’s 4/20 high holiday. To become law, the bill will also have to be passed by the Democratic-majority Senate and signed by Democratic President Joe Biden.