Attorneys general for 19 states, including Alaska, are asking Congress to pass legislation that expressly allows banks to provide services to marijuana businesses operating in compliance with state law.
“Allowing banks to work with these businesses is good policy, which is why the concept has bipartisan support,” said Alaska Attorney General Jahna Lindemuth. “Most importantly, bringing the cash from state-licensed marijuana businesses into the banking system will alleviate the public safety issues that come with having to rely on cash, instead of depositing money in a bank. It will also help state regulators better oversee the new industry and go after bad actors.”
The letter to congressional leaders of both parties noted that 29 states and several U.S. territories have legalized the medical use of marijuana, and that eight states and the District of Columbia also allow recreational use of marijuana by adults at least 21 years of age.
Still, because the federal government classifies marijuana as an illegal substance, banks providing services to state-licensed cannabis businesses could find themselves subject to criminal and civil liability under the Controlled Substances Act and certain federal banking statutes. This risk has significantly inhibited the willingness of financial institutions to provide services to these businesses, they said.
They also noted the contradictions between federal and state law aside, the marijuana industry continues to grow, with industry analysts reporting that sales grew by 30 percent to $6.7 billion in 2016 and expect that total to exceed $20 billion by 2021.
Yet these businesses are forced to operate on a cash basis, they said. This grey market makes it more difficult to track revenues for taxation purposes, contributes to a public safety threat as cash intensive businesses are often targets for criminal activity, and prevents proper tracking of large swaths of finances across the nation, they said.
Joining Alaska in signing the letter on Jan. 16 were attorneys general from California, Colorado, Connecticut, District of Columbia, Guam, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, New Mexico, New York, North Dakota, Oregon, Pennsylvania, Vermont and Washington.
