Colorado Attorney General Phil Weiser joined 37 other states and territories' attorneys general on Wednesday to ask Congress to pass the legislation that would allow marijuana businesses to access to the banking system.
The Secure and Fair Enforcement (SAFE) Banking Act, HR 1595, is sponsored by Democratic U.S. Rep. Ed Perlmutter of Arvada and has 173 co-sponsors, including Colorado's three other Democratic representatives.
Colorado's marijuana industry has generated more than $6.3 billion in sales in the past five years, almost entirely in cash. For years it has has coped with a lack of access to banking services because the Drug Enforcement Administration continues to label marijuana as a Schedule 1 drug. That means that companies that sell marijuana, even legally in dozens of states, can't get bank accounts.
The solution, according to Colorado lawmakers, state elected officials and members of Congress, is for Congress to pass legislation allowing those businesses to obtain bank accounts.
What makes the attorneys' general action unique is that it is now an official policy of the National Associations of Attorneys General. The group only adopts official actions when it has both bipartisan and super-majority support from the nation’s attorneys general.
After the bill was introduced, the National Organization for Reform of Marijuana Laws said in a statement: "Hundreds of licensed and regulated businesses do not have access to the banking industry and are unable to accept credit cards, deposit revenues, or write checks to meet payroll or pay taxes. This situation is untenable. No industry can operate safely, transparently, or effectively without access to banks or other financial institutions. Congress must move to change federal policy so that these growing number of state-compliant businesses, and their consumers, may operate in a manner that is similar to other legal commercial entities."
State treasurers, including Colorado's Dave Young, have also lent support to the SAFE Act. In an April 30 letter, 17 state treasurers wrote to the House Financial Services Committee, pleading with them to pass the bill.
It's to the benefit of both the businesses and the federal government, the treasurers said. Cash-only environments are a public safety risk, they wrote. On the law enforcement side, allowing those businesses access to banks will provide law enforcement with the tools to ensure the businesses are operating legally and avoid situations like money laundering, they explained.
The attorneys general call to action added that, despite "contradictions between federal and state law, the marijuana industry continues to grow rapidly. Industry analysts estimate 2017 sales at $8.3 billion and expect those totals to exceed $25 billion by 2025."
Yet because revenue is handled outside of the regulated banking system, "businesses are forced to operate on a cash basis," according to the call to action. "The resulting grey market makes it more difficult to track revenues for taxation and regulatory compliance purposes, contributes to a public safety threat as cash-intensive businesses are often targets for criminal activity, and prevents proper tracking of billions in finances across the nation."
According to the treasurers' letter, 34 states, three U.S. territories and the District of Columbia have legalized medical marijuana. Ten states and Washington, D.C., have legalized recreational marijuana.
In March, the House Financial Services Committee voted 45-15 to send the measure on to the House Judiciary Committee's Subcommittee on Crime, Terrorism and Homeland security, where it has sat since April 8.
The measure's support is growing, especially among the banking industry. According to a statement Wednesday from Perlmutter, the bill has the backing of the Credit Union National Association, Independent Community Bankers Association, America Bankers Association, Mid-size Bank Coalition of America and the Electronic Transaction Association.
Law enforcement and a multitude of national insurance groups also back the bill, according to Perlmutter's statement.
Colorado lawmakers tried in 2014 to set up a co-op, like a credit union, for marijuana businesses. The problem is that the co-op still needed approval from the Federal Reserve, and that never happened.
However, a credit union known as Fourth Corner sued the Federal Reserve back in 2015 and in 2018 won the right to a master account that would allow it to cash checks and conduct other financial transactions with cannabis businesses in Colorado.
But that still hasn't happened; the credit union would need deposit insurance from the federal National Credit Union Administration, which has so far denied the applications. Fourth Corner sued over that, too, but lost.
Should the credit union get up and running, however, it wouldn't do the marijuana dispensaries or the companies that own them any good. The Federal Reserve made it clear that the credit union could offer accounts to non-plant marijuana businesses like those dealing with packaging or technology.
Dispensaries need not apply.