Michigan's Attorney General, Dana Nessel, alongside a group of 22 fellow Attorneys General, has voiced strong support for the SAFER Banking Act of 2023. This Act seeks to eliminate current banking restrictions, paving the way for state-sanctioned cannabis enterprises to enjoy a full spectrum of banking and financial services.
Even as an increasing number of states have authorized and regulated cannabis businesses, federal law—specifically the Controlled Substances Act and some banking laws—still classifies cannabis as an illicit substance. Consequently, financial institutions serving these state-compliant cannabis businesses face potential criminal and civil liabilities.
This inconsistency in federal and state laws has caused significant challenges for these businesses. Not only does it create hurdles for new entrants into the cannabis industry, but existing entities also grapple with financial stability. The current restrictions impede state agencies from effectively collecting taxes and performing due diligence. More gravely, the need for businesses to rely solely on cash transactions increases the risk of violent crimes targeting both employees and customers.
"Despite their legal status at the state level, cannabis businesses are unjustly barred from the same banking services that other legal enterprises freely enjoy," remarked AG Nessel. She emphasized the undue vulnerability this creates, making the cannabis sector an easy mark for criminals. "It's only just that every legal business has unhampered access to banking. It safeguards the businesses, their employees, and the general public. Therefore, it's paramount for Congress to greenlight the SAFER Banking Act and align federal banking regulations with the progressive state laws."
The collective stance of the Attorneys General is clear: passing the SAFER Banking Act will be instrumental. It will stimulate economic growth, augment state-level oversight of tax commitments, and mitigate public safety concerns tied to high-cash operations.
Furthermore, the SAFER Banking Act aims to create a 'safe harbor' for financial institutions. This will enable them to serve cannabis businesses in states with robust regulations, ensuring accountability within the cannabis sector.
Endorsing a robust safe harbor, the Attorneys General believe it will channel billions into the banking industry. This influx will equip law enforcement and tax agencies—at both federal and state levels—and cannabis overseers in thirty-eight states and multiple territories to supervise and ensure the legality of cannabis businesses and their transactions more efficiently.
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