WASHINGTON, D.C. – Attorney General Karl A. Racine today led a bipartisan coalition of 38 Attorneys General urging Congress to pass the Secure and Fair Enforcement (SAFE) Banking Act (H.R. 1595) or similar measures that would allow legal marijuana-related businesses to access the banking system. This would bring billions of dollars of existing cash transactions into the regulated banking sector, subject them to oversight, and reduce the risk of both violent and white-collar crime affecting the marijuana industry.
“Our bipartisan coalition is urging Congress to pass the SAFE Banking Act to prevent criminal activity and increase oversight of the legal marijuana industry that already exists in 33 states,” said AG Racine. “This necessary modification would increase transparency in the flourishing legal marijuana industry while deterring the spreading criminal activity that has developed in the absence of such supervision. And, once Congress passes the SAFE Banking Act, I urge them to remove obstacles to the District of Columbia regulating its own marijuana industry.”
Although 33 states and several U.S. territories have legalized medical marijuana, current federal law prevents banks from providing services to these state-regulated businesses. This situation has forced legal businesses to operate almost entirely in cash and poses serious safety threats by creating targets for violet crimes like armed robbery, and white-collar crime, including money laundering. The SAFE Banking Act would permit marijuana-related businesses in states and territories with existing regulatory structures to access the federal banking system.
The SAFE Banking Act has widespread, bipartisan support with 172 cosponsors in the U.S. House. The House Financial Services Committee approved the bill in March and now it awaits a vote by the full House. AG Racine previously voiced his support for this legislation in in March, writing that:
The SAFE Banking Act would give legitimate cannabis businesses more certainty and safety, while deterring criminal activity like organized crime and money laundering that flourishes without oversight. Though Congress may not be ready to consider legalizing marijuana outright, passing this bill would be a first step toward bringing this industry out of the shadows.
Now, with the backing of 38 of the nation’s Attorneys General, the bipartisan National Association of Attorneys General (NAAG) has chosen to endorse the legislation as one of its official policy positions. Historically, NAAG endorses less than a dozen policies a year.
The full text of the letter can be read at: https://oag.dc.gov/sites/default/files/2019-05/SAFE-Banking-Act-2019-NAAG-Letter.pdf
The coalition of states and territories was led by District of Columbia AG Karl Racine, Colorado AG Phil Weiser, Nevada AG Aaron Ford, and North Dakota AG Wayne Stenehjem. It also includes Alaska, Arizona, Arkansas, California, Connecticut, Delaware, Guam, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, New Jersey, New Mexico, New York, the Northern Mariana Islands, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, the U.S. Virgin Islands, Utah, Vermont, Virginia, Washington, West Virginia, and Wisconsin.
In addition to lack of access to the banking system, the District’s marijuana industry faces unique challenges. Congress has prohibited the District from spending money to enact or carry out any law, rule or regulation to legalize or reduce penalties for marijuana. AG Racine, along with Councilmember David Grosso, recently published urging Congress to allow the District to determine for itself how to regulate marijuana.