More Than 20 Governors Urge Congress to Add Cannabis Banking to Defense Bill

Nov 17, 2021Banks & Credit Unions, Congressional Legislation, News

More than 20 governors signed a joint letter to members of Congress earlier this month, advocating for them to add cannabis banking legislation to the 2022 National Defense Authorization Act (NDAA), stating that it is a public safety issue.

“Thirty-seven states, four U.S. territories, and the District of Columbia have passed some form of recreational or medical cannabis legalization measures,” the letter reads. “Medical and recreational cannabis sales in the U.S. were estimated to total $17.5 billion last year, but because of antiquated federal banking regulations, almost all cannabis transactions are cash-based. Not only are cash-only businesses targets for crime, cannabis businesses are further disadvantaged compared to other legal businesses by being unable to open bank accounts or obtain loans at reasonable rates.”

“The cannabis industry is legal in some form in the majority of U.S. states and it is too large of a market to be prohibited from banking opportunities,” the letter continues.

In September, the House of Representatives added the Secure and Fair Enforcement (SAFE) Banking Act to its version of the NDAA. In their letter, the governors listed multiple “harms” that the SAFE act would fix by giving legal cannabis companies banking access.

“Financial institutions will subject the funds and account holders to rigorous anti-money laundering and ‘Know Your Customer’ requirements that will further help states where cannabis has been made legal to keep bad actors out of the system,” the Governors write. “The SAFE Banking Amendment will also harmonize federal and state law to ensure that depository institutions that provide banking services to legitimate cannabis-related businesses and ancillary businesses are not penalized.”

The letter is part of the ongoing effort to add cannabis banking legislation to larger measures. House Democrats tried to attach it to two COVID-19 relief bills this past year, but Senate lawmakers focused on the Cannabis Administration and Opportunity Act (CAOA), draft legislation that would remove cannabis from the federal list of controlled substances.

Senate majority leader Chuck Schumer (D-N.Y.) stated that he would be willing to advance the cannabis banking bill by attaching it to the NDAA, as long as lawmakers include social equity provisions.

“The banking bill only deals with a small part of [issues related to cannabis], but not what needs to be done. We need a broad comprehensive bill,” he said in July.

The letter was signed by the governors of Alaska, Colorado, California, Connecticut, Illinois, Maine, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Dakota, Oregon, Pennsylvania, Rhode Island, Utah, Virginia, Washington, and Wisconsin, as well as the Territories of Guam and the U.S. Virgin Islands and the District of Columbia.

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