24 U.S. governors call on Congress to pass cannabis banking bill

The governors of 24 U.S. states and territories sent a letter to congressional leaders on Thursday calling for passage of the Secure and Fair Enforcement (SAFE) Banking Act, a bill that would allow the legal cannabis industry access to banking services.

In the letter, which was sent to Senate Majority Leader Chuck Schumer (New York), House Speaker Nancy Pelosi and other Democratic and Republican congressional leaders, the governors of 21 states, Washington, D.C., the U.S. Virgin Islands and Guam request that the provisions of the law SAFE Banking be included in the final version of the National Defense Authorization Act for Fiscal Year 2022.

A cash-intensive sector

If the bill passes the Senate and becomes law, federal banking regulators will be prohibited from penalizing banks that choose to work with legal cannabis businesses in their state.

Current regulations require banks to submit to federal laws, and thus to cannabis prohibition, leaving the cannabis industry to operate in a risky, cash-heavy environment. The legislation was first introduced in the Chamber in 2013 by Democratic Representative Ed Perlmutter of Colorado, who has reintroduced the bill in every congressional cycle.

«Medical and recreational cannabis sales in the U.S. were estimated at $17.5 billion last year, but due to archaic federal banking regulations, nearly all cannabis transactions are cash-based,» the governors wrote in their letter. «Not only are cash-only businesses targets for crime, but cannabis businesses are at an even greater disadvantage compared to other legal businesses because they cannot open bank accounts or obtain loans at reasonable rates.»

The SAFE Banking Act has been passed by the House of Representatives in 2019 and again last year as part of a COVID-19 pandemic relief bill. The House passed the bill again in April as stand-alone legislation and included the measure in the defense authorization bill currently under consideration, but the bill has so far failed to pass both houses of Congress and be signed by the President.

«It's time for Congress to allow cannabis-related businesses better access to the banking system and to operate with normal bank accounts,» Polis said in a press release Thursday. «Thanks to Congressman Ed Perlmutter who has continually pushed for legislation to address this important issue. After years of cannabis legalization in a multitude of states, it's high time that cannabis businesses can finally operate financially alongside other businesses in the nation's open banking system.»

The governors also noted in the letter that, although cannabis has been legalized in some form by a majority of U.S. states, the persistent lack of traditional banking services and large amounts of cash throughout the supply chain expose legal cannabis businesses to an increased risk of theft and other crimes. In addition, the lack of access to loans hinders the growth of this booming industry.

«The SAFE Banking Amendment will remedy these harms and contribute to community safety in our states and territories by enabling legitimate and legal cannabis businesses to access banking services,» the letter continues. «Financial institutions will subject funds and account holders to rigorous anti-money laundering and know-your-customer requirements, further helping states where cannabis has been legalized to prevent bad actors from entering the system.».

«The SAFE Banking Act has more bipartisan support than ever, and Congress must take action to ensure that this measure is included in the final version of the NDAA that will go to President Biden's desk,» the governors concluded.