A bipartisan group of 20 state and territorial attorney generals has called for the passage of a federal bill that would give cannabis industry businesses access to the U.S. banking system. In a letter sent to leaders of both the U.S. Senate and House of Representatives on Thursday, the governors urged the passage of the Secure and Fare (SAFE) Banking Act of 2019 (H.R. 1595).
Gov. Gretchen Whitmer of Michigan, one of the governors who signed the letter, said that voters have made it clear that it is time for a new approach to cannabis policy.
“Michiganders turned out in historic numbers in this last election to legalize the use of recreational marijuana, and we must respect the will of the voters,” Whitmer said. “There is an inherent danger for businesses operating in an all-cash business because financial institutions are unable to accept the risks and penalties associated with providing service to this industry under current law. This letter sends a clear message to Congress that our states are looking for a real solution to a real problem, and we support them to get this done.”
Cannabis Industry Denied Access to Banking
Due to federal drug and money laundering regulations, even cannabis businesses operating in compliance with state laws are often unable to obtain financial services regularly used by other industries. As a result, companies in the cannabis industry often do business only in cash, creating extreme risk for the firms and their employees. The SAFE Banking Act would protect financial institutions and likely make more banks willing to serve the cannabis industry.
“Many of our states have implemented laws and regulations that ensure accountability of the cannabis industry,” wrote the governors in the letter. “However, without banking services, cannabis businesses are less able to obey the law, pay taxes, and follow these important regulations. The public safety risks posed by these cash-only businesses can be mitigated through access to banking service providers.”
The governors called on congressional leaders to join the states in supporting cannabis operators willing to leave the black market and subject their businesses to regulation and taxation.
“State and federal governments have a shared interest in upholding the rule of law, protecting public safety, and transitioning markets out of the shadows and into our transparent and regulated banking system. Without access to banking services, state-licensed cannabis businesses operate predominantly on a cash basis. This poses a significant public safety risk to customers and employees,” the letter reads.
Letter Signed by 20 Governors
In addition to Whitmer, the letter was signed by the governors of Colorado, Connecticut, Guam, Illinois, Maine, Maryland, Minnesota, Nevada, New Jersey, New Mexico, North Dakota, Oregon, Pennsylvania, Utah, Virginia, the U.S. Virgin Islands, Washington, West Virginia, and Wisconsin.
The governors’ action comes just over a month after the attorneys general of 33 states and five territories similarly called for the passage of the SAFE Banking Act. The bill was introduced by Democratic Rep. Ed Perlmutter of Colorado in March and approved by the House Financial Services Committee later that month. The legislation is pending further action in the House, where it has more than 200 cosponsors.