24 governors urge Congress to pass cannabis banking law |

The governors of 24 states and U.S. territories sent a letter to the leaders of Congress on Thursday urging lawmakers to pass laws that allow financial institutions to provide banking services to the regulated cannabis industry. The letter from the bipartisan group of two dozen governors seeks the passage of the Secure and Fair Enforcement (SAFE) law, which was approved by the House of Representatives in September as part of a comprehensive law that approves defense spending.

In the letter sent to Senate Majority Leader Chuck Schumer of New York, House Speaker Nancy Pelosi, and other Democratic and Republican leaders in Congress, the governors of 21 states, Washington, DC, the US Virgin Islands and Guam, for incorporating the provisions of the SAFE Banking Act into the final version of the National Defense Authorization Act for fiscal year 2022.

Relief for a cash-heavy industry

If passed by the Senate and signed, state banking regulators would be prohibited from penalizing banks that choose to serve cannabis companies that do business in accordance with state law. Under current regulations, banks are subject to federal money laundering penalties and other laws for operating such businesses, which means that the cannabis industry has to operate in a risky environment with lots of cash. The bill was originally introduced to the House of Representatives in 2013 by Colorado Democratic Representative Ed Perlmutter, who reintroduced the bill in each subsequent Congressional cycle.

The letter sent Thursday, led by Colorado Democratic Governor Jared Polis, states that 37 states, four U.S. territories, and the District of Columbia have passed measures to legalize recreational or medicinal cannabis. But companies in the regulated cannabis industry still largely lack access to traditional banking services like deposits, payrolls, and checking accounts.

“Medical and recreational cannabis sales in the US were estimated at $ 17.5 billion last year, but due to obsolete federal bank regulations, almost all cannabis transactions are cashless,” the governors wrote in their letter. “Not only cash companies are targets for crime, cannabis companies are further disadvantaged compared to other legal companies because they are unable to open bank accounts or obtain loans at reasonable prices.”

The SAFE Banking Act was passed by the House of Representatives in 2019 and last year under a COVID-19 Pandemic Relief Act. The House of Representatives re-enacted the bill as a stand-alone law in April and included the measure in the currently under review law on defense authorization, but the bill has not yet been passed by either house of Congress and put into effect by the President.

“It is time that Congress gave cannabis-related companies better access to the banking system and operate with normal bank accounts,” Polis said in a press release on Thursday. “Thanks to Congressman Ed Perlmutter for constantly pushing for legislation to address this important issue. After cannabis was legal in a large number of countries for years, it is long overdue for cannabis companies to finally operate financially alongside other companies in the open national banking system. “

Governors also noted in the letter that while cannabis has been legalized in some form by the majority of the U.S. states, the persistent lack of traditional banking services and large amounts of cash across the supply chain mean that legal marijuana companies are one are exposed to increased risk of robbery and other crimes. In addition, the lack of access to credit is hampering the growth of the booming industry.

“The SAFE Banking Amendment will repair this damage and help keep communities safe in our states and territories by giving legitimate and legal cannabis companies access to banking services,” the letter said. “Financial institutions will expose funds and account holders to stringent anti-money laundering and ‘know your customer’ requirements, which states that have legalized cannabis will further help keep bad actors out of the system.

“The SAFE Banking Act has more bipartisan support than ever and Congress must take steps to ensure that this move is included in the final version of the NDAA that goes to President Biden’s desk,” concluded the governors.

In addition to Polis, the letter to Congress was signed by the leaders of Alaska, California, Connecticut, Guam, Illinois, Maine, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, New Jersey, New York, North Dakota, Oregon, Pennsylvania, Rhode Iceland, the US Virgin Islands, Utah, Virginia, Washington State, Washington, DC, and Wisconsin.

In April, a bipartisan group of 21 governors from an almost identical list of states and territories called on Congress to pass the SAFE Banking Act after the measure was approved by the House of Representatives.