MARYLAND, USA — Recreational use of cannabis is legal in 23 states, two territories, and D.C. currently but banking restrictions appear to be holding some state-licensed cannabis businesses back. An issue that 22 Attorneys General are urging Congress to fix.
Maryland Attorney General Anthony G. Brown led a coalition of 22 Attorneys General, along with Washington D.C. Attorney General Brian L. Schwalb, in submitting comments pushing for congressional leaders to advance the Secure and Fair Enforcement Regulation (SAFER) Banking Act.
The bill would enable regulated banks and financial institutions to provide services to state-licensed cannabis businesses.
While many states have legally authorized and regulated cannabis businesses, including Maryland, cannabis is still classified as a federally illegal substance. Because of that classification, banks providing services to state-licensed cannabis dispensaries and related businesses are at risk for criminal and civil liability. Due to these risks, many states have seen that businesses can only operate in cash, putting employees and customers at a greater risk of violent crime from those wishing to take that money.
"The entire supply chain is burdened by a cash issue," said Wendy Bronfein with the Maryland based medical marijuana business Curio Wellness.
Bronfein said without access to traditional banking services business owner often can't get loans, can't write-off expenses which can lead to higher taxes, and can't accept credit cards.
"There is a massive safety issue relative to the amount of cash on hand," she said. "For an industry that, particularly from the therapeutic standpoint of cannabis, is trying to have a legitimate conversation, it's hard to have that when you enter a building with an armed guard."
Additionally, officials claim the lack of banking access creates a barrier to agencies' efforts to collect taxes and oversee the businesses.
“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.”
With the passage of the SAFER Banking Act, the Attorneys General argue regulated banks and financial institutions will be able to provide services to state-licensed cannabis businesses, enabling economic growth, facilitating state oversight of tax obligations, and reducing the public safety risks associated with high-value, cash-based businesses.
Maryland and D.C. were just two of 22 Attorneys General pushing for congressional leaders to advance the bill. Others include Oklahoma, Arizona, California, Colorado, Connecticut, Georgia, Hawaii, Illinois, Massachusetts, Maine, Michigan, New Jersey, New Mexico, Nevada, New York, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington.