27 September 2023- Maryland Attorney General Anthony G. Brown led a coalition of 22 Attorneys General, along with Washington D.C. Attorney General Brian L. Schwalb and Oklahoma Attorney General Gentner Drummond, in submitting comments urging congressional leaders to advance the SAFER Banking Act of 2023 to lift banking restrictions that prevent state-licensed cannabis businesses from accessing a full range of regulated banking and financial services.
Despite the growing number of states who have legally authorized, regulated cannabis businesses, including Maryland, 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 dispensaries and related businesses are at risk for criminal and civil liability. This risk has significantly inhibited the ability of financial institutions to provide services to regulated cannabis operators and leaves those businesses struggling to find financing. The lack of access to banking services creates both barriers to entry into the industry and instability for existing businesses. In addition, the current banking restrictions constrict state agencies’ effort to collect taxes and conduct oversight. Further, as too many states have seen, when regulated businesses can only conduct business in cash, employees and customers are at greater risk of violent crime in pursuit of that cash.
“Legal cannabis businesses should have access to funding that provides them opportunities equal to other industries to grow, contribute to the economy, and create new jobs. This is particularly important for small, minority-owned, and women-owned businesses, which have faced disproportionately high barriers to accessing funding,” said Attorney General Brown. “Just like any other business, the cannabis industry cannot operate safely, transparently, or effectively without access to financial services. Without the SAFER Banking Act, we are setting up these businesses to fail, and opportunities for Marylanders will be lost.”
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, facilitate state oversight of tax obligations, and reduce the public safety risks associated with high-value, cash-based businesses. The SAFER Banking Act would establish a safe harbor for depository institutions providing a financial product or service to a regulated business in states that have regulations to ensure accountability in the cannabis industry.
The Attorneys General argue that an effective safe harbor would bring billions of dollars into the banking sector, enabling law enforcement, federal, state, and local tax agencies, and cannabis regulators in thirty-eight states and several territories to more effectively monitor and ensure compliance of cannabis businesses and their transactions.
Joining the Maryland, Washington D.C., and Oklahoma–led comments are the Attorneys General of Arizona, California, Colorado, Connecticut, Georgia, Hawaii, Illinois, Massachusetts, Maine, Michigan, New Jersey, New Mexico, Nevada, New York, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington.