Attorneys general for 34 states and territories asked Congress on Tuesday to include protections in its coronavirus relief plans for banks that service legal marijuana businesses.
The bipartisan group of top law enforcement officials made the request to leaders of the Senate and House of Representatives amid a renewed push on Capitol Hill to provide safeguards for banks that work with legitimate marijuana businesses that operate under and against state and federal law, respectively, such as professional pot growers and medical and recreational dispensaries.
Thirty-three states have legalized marijuana to different degrees, including nine with thriving commercial industries in place. Cannabis remains illegal under federal law, however, so banks are often reluctant to service dispensaries and other businesses over fear of facing reprisal from government regulators.
In their letter to lawmakers, the attorneys general repeated an earlier call for Congress to provide a “safe harbor” for banks that work with marijuana businesses but suggested it do as much as part of any future relief package offered in response to the ongoing novel coronavirus pandemic, offering three reason why the believes legislative relief is needed now more than ever.
“First, threats to public safety caused by a cash-intensive business model, often the target of criminal activity, have intensified in the months since the pandemic began. Next, the presence of large cash transactions places law enforcement, tax regulators, consumers and patients at heightened risk of exposure to the virus. Finally, the ability to efficiently collect tax revenue from the marijuana industry, estimated to have generated $15 billion in sales in 2019, will provide critical relief for state and local governments predicting budget shortfalls due to the pandemic,” argued the group of attorneys general, which is largely comprised of Democrats but includes seven Republicans.
“The current predicament of a rapidly expanding national marketplace without access to the national banking systems has resulted in an untenable situation,” they wrote lawmakers including House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell, among others. “We stress that current legislative models are available to fix this situation.”
Indeed, a bill pending on Capitol Hill — the Secure and Fair Enforcement (SAFE) Banking Act — would achieve the group’s aim by stating in part that federal regulators may not “prohibit, penalize or otherwise discourage” a financial institution from working with legitimate cannabis businesses.
Passed last year in the House with bipartisan support, the SAFE Banking Act had been stalled ever since due to being ignored in the Senate where Mr. McConnell, Kentucky Republican, has control. Its consideration could become moot if the Senate passes the latest coronavirus relief package cleared by the House, however, which includes a provision containing language identical to the stalled banking bill.
“The purpose of this section is to increase public safety by ensuring access to financial services to cannabis-related legitimate businesses and service providers and reducing the amount of cash at such businesses,” begins the part of the Health and Economic Recovery Omnibus Emergency Solutions Act, or HEROES Act, containing the revived banking bill.
Mr. McConnell has since taken issue with Democrats for including the marijuana banking bill in the HEROES Act, arguing last week that the sheer number of times the word “cannabis” appears in the House bill exemplifies a “totally unserious effort” on their part to pass a relief bill and suggested its language might not withstand the Senate’s scrutiny.
The latest letter to congressional leadership was led by Colorado Attorney General Phil Weiser, a Democrat, and North Dakota Attorney General Wayne Stenehjem, a Republican. Their co-signers include counterparts in Alaska, Arkansas, California, Connecticut, Delaware, the District of Columbia, Guam, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Northern Mariana Islands, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Utah, Vermont, Virginia, Washington, West Virginia and Wisconsin.