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AG Nessel Joins Coalition in Urging Congress to Increase Access to Regulated Banking and Financial Services for State-Licensed Cannabis Businesses
September 28, 2023
LANSING – Michigan Attorney General Dana Nessel joined a coalition of 22 Attorneys General in submitting comments urging congressional leaders to advance the SAFER Banking Act of 2023 to lift banking restrictions that prevent state-licensed cannabis businesses from accessing a full range of regulated banking and financial services.
Despite the growing number of states that have legally authorized, regulated cannabis businesses, cannabis remains classified as an illegal substance under the federal Controlled Substances Act and certain federal banking statutes. Because cannabis remains classified as an illegal substance, banks providing services to state-licensed cannabis sales locations and related businesses are at risk for criminal and civil liability. This risk has significantly inhibited the ability of financial institutions to provide services to regulated cannabis licensees and leaves those businesses struggling to find financing. The lack of access to banking services creates both barriers to entry into the industry and instability for existing businesses. In addition, the current banking restrictions constrain state agencies’ efforts to collect taxes and conduct oversight. Further, as too many states have seen, when regulated businesses can only conduct business in cash, employees and customers are at greater risk of violent crime in pursuit of that cash.
“Legal cannabis businesses are still prevented from using traditional banking services available to all other legal businesses in the state,” Nessel said. “Without access to traditional banking the cannabis industry is left as a ripe target for criminals. Any legal business should have fair access to our banking institutions for the security of their own business and employees as well as public safety. It is important that Congress pass the SAFER Banking Act to update federal banking laws that have not caught up to the laws in many states.”
The attorneys general argue that passage of the SAFER Banking Act, which will enable regulated banks and financial institutions to provide services to state-licensed cannabis businesses, will enable economic growth, facilitate state oversight of tax obligations, and reduce the public safety risks associated with high-value, cash-based businesses. The SAFER Banking Act would establish a safe harbor for depository institutions providing a financial product or service to a regulated business in states that have regulations to ensure accountability in the cannabis industry.
The attorneys general argue that an effective safe harbor would bring billions of dollars into the banking sector, enabling law enforcement, federal, state, and local tax agencies, and cannabis regulators in thirty-eight states and several territories to more effectively monitor and ensure compliance of cannabis businesses and their transactions.
Joining the Maryland, Washington D.C., and Oklahoma–led comments are the attorneys general of Arizona, California, Colorado, Connecticut, Georgia, Hawaii, Illinois, Maine, Massachusetts, Nevada, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington.