Governor Janet Mills announced today that she has signed onto a letter with a bipartisan coalition of governors from across the country urging Congress to pass legislation that would allow financial institutions in states like Maine with legalized medical or adult-use cannabis to serve state-licensed marijuana businesses without penalty.
Currently, many banks and credit unions are inhibited in working with businesses that earn profits on marijuana or cannabis-related products because federal law classifies marijuana as an illegal substance, which consequently leaves state-licensed businesses without ready access to banking services and forces them to operate predominantly on a cash basis. In their letter, Governor Mills and her fellow governors urge Congress to pass the Secure and Fair Enforcement (SAFE) Banking Act, or similar legislation, in order to remove the legal uncertainty for banks and credit unions, reducing their risk, enhancing public safety, and increasing financial transparency.
“Over the course of the last several months, my Administration has worked quickly to stand up Maine’s adult-use recreational marijuana market, as passed by the voters in 2016,” said Governor Mills. “As the Legislature nears final approval of the rules, it is important for Congress to do its part and bring the federal government’s banking practices in line with states like Maine that have seen fit to legalize marijuana. Doing so will encourage state-licensed businesses to use established banking institutions, protect these financial institutions from federal sanction, and create a higher level of transparency and accountability.”
As then-Attorney General, Governor Mills also signed onto a similar letter.
The letter was led by Governor Phil Murphy (D-New Jersey) and signed by Governors Larry Hogan (R-Maryland), Jay Inslee (D-Washington), Jim Justice (R-West Virginia), Tony Evers (D-Wisconsin), Gary Herbert (R-Utah), Michelle Lujan Grisham (D-New Mexico), Doug Burgum (R-North Dakota), Ralph Northam (D-Virginia), Jared Polis (D-Colorado), Tim Walz (D-Minnesota), Kate Brown (D-Oregon), JB Pritzker (D-Illinois), Steve Sisolak (D-Nevada), Tom Wolf (D-Pennsylvania), Ned Lamont (D-Connecticut), Albert Bryan Jr. (D-Virgin Islands), Leon Guerrero (D-Guam), and Gretchen Whitmer (D-Michigan).
The complete text of the letter is as follows and a copy is attached (PDF):
June 13, 2019
Dear Congressional Leaders:
As our States’ chief executives, we urge Congress to pass legislation allowing states with legalized medical or adult-use cannabis to operate safely and under the scrutiny of the national banking system. We strongly support the passage of the Secure and Fair Enforcement (SAFE) Banking Act (H.R. 1595) and (S.1200) or similar legislation that would remove the legal uncertainty for banks and credit unions, reducing their risk, enhancing public safety, and increasing financial transparency.
We were pleased that the House Financial Services Committee held a subcommittee hearing on cannabis and financial services on February 13, and we were especially encouraged to see that H.R. 1595 passed the full committee on a strong bipartisan basis on March 28. We urge the full House to pass this legislation to help provide banking services to state-licensed cannabis businesses.
State and federal governments have a shared interest in upholding the rule of law, protecting public safety, and transitioning markets out of the shadows and into our transparent and regulated banking system. Without access to banking services, state-licensed cannabis businesses operate predominantly on a cash basis. This poses a significant public safety risk to customers and employees. Additionally, because banking services are barred, these businesses are unable to write checks, make and receive electronic payments, utilize a payroll provider, or accept credit and debit cards. The cash-only environment puts an additional burden on state and local government agencies that must collect tax and fee payments, in person and in cash, incurring additional public expenses and employee safety risks.
Currently, thirty-four U.S. states, three U.S. territories, and the District of Columbia have legalized the medical use of cannabis. Additionally, ten states and the District of Columbia have legalized recreational use by adults over 21 years of age. Despite legalization of cannabis at the state-level – in many cases to provide medical treatment - our financial institutions face enormous barriers, legal risks, and criminal and civil liability under the Controlled Substances Act that prevent them from providing banking services to state-licensed businesses. As a result, very few banks and credit unions will provide these services, leaving many businesses in this sector unbanked.
Many of our states have implemented laws and regulations that ensure accountability of the cannabis industry. However, without banking services, cannabis businesses are less able to obey the law, pay taxes, and follow these important regulations. The public safety risks posed by these cash-only businesses can be mitigated through access to banking service providers.
To adequately address these issues, we urge Congress to pass legislation, such as the SAFE Banking Act (H.R. 1595) and (S.1200), that would provide a safe harbor for depository institutions that provide a financial product or service to a cannabis business in states that have legalized it. We look forward to working with you as legislation progresses to address this urgent public policy concern.