A bipartisan group of Attorneys General ("AGs") from thirty-three states and five U.S. territories urged Congress to establish a safe harbor for financial institutions providing services to state-licensed cannabis businesses. The AGs called on Congress to pass the Secure and Fair Enforcement Banking Act of 2019 ("SAFE Banking Act") or similar legislation.
The AGs expressed concern about the risks associated with legal cannabis industry revenues being handled outside of the banking system. The AGs warned that these risks present threats to public safety because cannabis businesses may hold large amounts of cash on-site, making them targets for criminals. The AGs also said that cannabis businesses are "cash-intensive." As a result, there are issues concerning the tracking of revenues, which is a problem for tax collection and regulatory compliance.
The AGs stated that the "states, territories and federal government share a strong interest in protecting public safety and bringing grey market financial activities into the regulated banking sector." The AGs suggested that the passage of a safe harbor for financial institutions providing services to cannabis-related legitimate businesses would "ensure accountability" in the industry.
Commentary / Jordan Thompson
The AGs called on Congress to set aside their personal opinions on the legalization of marijuana and accept the decisions made by the states. Given this degree of support of a banking safe harbor from the enforcement establishment, the near-term adoption of such a measure appears more and more likely.
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