The top law enforcement officials from 38 U.S. states and territories are calling on Congress to pass legislation to increase marijuana businesses’ access to banks. The move comes just days after the treasurers of 17 states issued a separate call in support of the pending cannabis financial services bill.
Even as a growing number of states adopt laws to legalize marijuana for medical or recreational use, federal prohibition remains intact—for now—and that makes many banks wary of maintaining accounts for cannabis growing, processing or retail operations. They could, they fear, be prosecuted under federal money laundering laws.
Legislation to shield financial services providers from being punished by regulators for working with the cannabis industry has been gaining momentum in Congress, and now the effort is getting a boost from the National Association of Attorneys General, which is officially endorsing the bill.
“Businesses are forced to operate on a cash basis. 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 in a letter to congressional leaders on Wednesday.
@COAttnyGeneral leads coalition of 38 state/territory AGs calling on #Congress to pass @RepPerlmutter's bill allowing #cannabis companies to access banks w/o fear of federal repercussions. @NatlAssnAttysGn has adopted this position as official policy.https://t.co/6kr60PamhQ
— CO Attorney General (@COAttnyGeneral) May 8, 2019
“[R]regardless of how individual policymakers feel about states permitting the use of medical or recreational marijuana, the reality of the situation requires federal rules that permit a sensible banking regime for legal businesses,” the officials wrote.
In March, the House Financial Services Committee approved the marijuana banking bill in a bipartisan vote of 45 to 15. The legislation, sponsored by Rep. Ed Perlmutter (D-CO), now has 173 cosponsors—substantially more than a third of the entire chamber’s membership. It is expected to be considered on the House floor within the next several weeks.
“The SAFE Banking Act is about public safety, accountability and respecting states’ rights. I appreciate the overwhelming support of the attorneys general and treasurers,” Perlmutter said in a statement. “Their endorsement of the SAFE Banking Act underscores the need to respect states’ rights on this issue and make our communities safer by allowing the marijuana industry and related businesses access to the banking system.”
The support of our nation's attorneys general and state treasurers underscores the need to respect states’ rights on this issue and make our communities safer by allowing the marijuana industry and related businesses access to the banking system. #SAFEBanking https://t.co/B1GpOUIoNK
— Rep. Ed Perlmutter (@RepPerlmutter) May 8, 2019
An identical companion bill on financial services for cannabis businesses in the Senate has 25 lawmakers signed on—fully a quarter of the body.
The new letter, led by Colorado Attorney General Phil Weiser, was joined by attorneys general from Alaska, Arizona, Arkansas, California, Connecticut, Delaware, the District of Columbia, Guam, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, New Jersey, New Mexico, New York, North Dakota, the Northern Mariana Islands, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, Utah, the U.S. Virgin Islands, Vermont, Virginia, Washington, West Virginia and Wisconsin.
— Rob McKenna (@robmckenna) May 8, 2019
Late last month, Oregon Treasurer Tobias Read led a group of fellow state fiscal officials in sending a separate letter to congressional leaders in support of the marijuana banking legislation.
“Businesses operating in cash pose a significant public safety risk. Absent access to banking services, cannabis-related businesses are unable to write checks, make and receive electronic payments, utilize a payroll provider, or accept credit and debit cards,” they wrote. “Processing, storing, and moving large amounts of cash puts business owners, their employees, and their customers at risk of violent crime. The cash-only environment means state and local government agencies must collect tax and fee payments in person and in cash, incurring added expenses and employee safety risks.”
Despite the advancement of the cannabis banking bill in the House, Senate Banking Committee Chairman Mike Crapo (R-ID)refused to commit to hold a hearing or vote on the bill in his panel when asked last month.
The proposals have already been endorsed by the American Bankers Association and a number of other organizations representing financial services industry interests, as well as by drug policy reform groups.
The backing by the state attorneys general, which was first reported by the Denver Post, could go a long way toward earning support from law-and-order conservatives who might otherwise scoff at the notion of supporting legislation to assist marijuana businesses.
Today I’m leading 38 AGs in urging Congress to pass the #SAFEBankingAct, to allow legal marijuana businesses to access the US banking system.
— AG Karl A. Racine (@AGKarlRacine) May 8, 2019
“Compliance with tax laws and requirements would be simpler and easier to enforce with the regulated tracking of funds in the banking system, resulting in higher tax revenues,” the attorneys general wrote. “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. This includes a banking system for marijuana-related businesses that is both responsive and effective in meeting the demands of our economy.”
— Xavier Becerra (@AGBecerra) May 8, 2019
— Ohio Attorney General Dave Yost (@OhioAG) May 8, 2019
The treasurers, in their letter, offered further encouragement to skittish lawmakers by saying that allowing the banking fix would not be “a tacit endorsement of descheduling or rescheduling cannabis from the Controlled Substances Act.”
“Without banking services, cannabis businesses are less able to obey the law, pay taxes, and follow state regulations of the industry,” they wrote. “The public safety risks posed by these businesses are easily mitigated through access to banking service providers and keeping the cash off the streets. Nearly every U.S. state has a stake in this issue.”