Chicago – Attorney General Kwame Raoul, as part of a bipartisan coalition of 22 attorneys general, urged congressional leaders to approve the SAFER Banking Act of 2023 to lift banking restrictions that prevent state-licensed cannabis businesses from accessing the 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 businesses are at risk for criminal and civil liability.
The SAFER Banking Act, which was approved by the Senate Banking Committee Wednesday, would establish a safe harbor for depository institutions providing a financial product or service to such businesses in states that have regulations to ensure accountability in the cannabis industry. In a letter to congressional leaders, Raoul and the attorneys general called for passage of the bipartisan legislation.
“Allowing financial institutions to provide services to legal cannabis companies would enable regulators to more effectively monitor and ensure compliance, and it would reduce the public safety risks associated with high-value, cash-based businesses,” Raoul said. “I urge Congress to take action and pass the SAFER Banking Act.”
The lack of access to banking services, including financing, creates both barriers to entry into the industry and instability for existing businesses. Cannabis companies that conduct business in cash because of a lack of access to banking services can become targets of crime. In addition, the current banking restrictions hinder state agencies’ efforts to collect taxes and conduct oversight.
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, bring billions of dollars into the banking sector and facilitate stronger state oversight of tax obligations.
Joining Raoul in sending the letter are the attorneys general of Arizona, California, Colorado, Connecticut, the District of Columbia, Georgia, Hawaii, Maryland, Massachusetts, Maine, Michigan, New Jersey, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, Vermont and Washington.