Billions of dollars in cash. Not just the number on a bank statement, but literally stacks upon stacks of cash. That’s what a majority of the cannabis industry in the U.S. is working with, but state attorneys general are hoping to change that.
Hailing from states and territories across the U.S., 38 attorneys general urged Congress in a joint statement to approve a proposal that would allow financial institutions like banks to work with cannabis-related businesses, as well as the ancillary businesses that serve them.
“This is simple: not incorporating an $8.3 billion industry into our banking system is hurting our public safety and economy,” said California Attorney General Xavier Becerra in the statement to Congress. “When it comes to the cannabis industry, California has made clear that it is moving forward and our nation should do the same. The SAFE Banking Act would reward taxpayers and small and local licensed businesses who play by the rules. We urge Congress to pass legislation to meet the demands of our growing economy.”
From the East Coast to the West Coast (and beyond), attorneys general supported the proposal from these states: Alaska, Arizona, Arkansas, California Connecticut, Colorado, Delaware, Guam, 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. Other attorneys general that signed included those from the District of Columbia, Guam, Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands.
The attorneys general are urging Congress to act, as their respective states have legalized or decriminalized cannabis and industry is stifled without access to banking services. Because it’s not just basic checking and savings accounts that many cannabis-related businesses find hard to get. Loans, credit cards, and other financial services are extremely hard to come by for cannabis-related businesses, often forcing businesses into private financing arrangements.
Some states are trying to solve this problem for themselves. California has been advancing a bill that would enable a limited number of banking services to be offered to cannabis-related businesses through state-chartered banks. But U.S. Secretary Steve Mnuchin recently told Congress that they must lead the way and make a bipartisan effort to find a regulatory solution at the federal level.
“California along with 32 states and several U.S. territories have legalized the medical use of marijuana,” according to the attorneys general statement to Congress. “However, because the federal government classifies cannabis as an illegal substance, banks providing services to state-licensed cannabis businesses can be subject to criminal and civil liability.”
Congress has been working on that in the form of the Secure and Fair Enforcement (SAFE) Banking Act, which would allow cannabis-related businesses to legally bank with federally controlled banks. The bill is still in the long process it takes to hammer out the fine details in such a complex change in regulations, but it could still be heard this year. The SAFE Act isn’t dead yet. Safe banking for a billion dollar industry has become a bipartisan issue, as the safety and logistical concerns that come from a cash-only industry are easy to see.