What’s the Issue?
Thirty-three states now permit some form of legal cannabis commerce – medical, recreational or both – yet the federal government still classifies cannabis as an illegal substance. And because cannabis is an illegal substance at the federal level, banks cannot offer even basic financial services to cannabis businesses.
Currently, if banks provide basic financial services to state-legal cannabis businesses they are at risk of criminal prosecution under federal laws. Moreover, any bank customer that derives proceeds from a cannabis business is also violating federal law, and consequently putting their banking services at risk. The result? Many banks avoid serving legal cannabis businesses, as well as those ancillary businesses that provide them with goods and services, forcing that sector of the state economy to operate on a cash-only basis.
How Does That Impact Me?
No matter where you stand on the broader issue of cannabis legalization, businesses cannot operate safely or transparently without access to banks. High volume, cash-only businesses are targets for crime and create a public safety risk that needs attention and action immediately. Our communities would be safer, and the cannabis industry would be better regulated, if cannabis businesses were able to access the banking system.
What Can Be Done?
Because it’s a federal issue, Congress has an opportunity to do something about it.
Congress should allow state-licensed cannabis businesses to participate in the banking system and remove the risk of criminal prosecution for banks that serve legitimate state cannabis businesses and their service providers. The House has passed the SAFE Banking Act, which would do just that, by a large, bipartisan margin. Now it’s up to the Senate to do something.
Learn more in-depth about cannabis banking here.