Time to bank the unbanked legal marijuana industry in this nation

Time to bank the unbanked legal marijuana industry in this nation
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Despite the billions of dollars generated each year by the legal marijuana businesses operating in 33 states and the District of Columbia, the legal marijuana market in this country remains frustratingly, and hazardously, unable to participate within the traditional United States banking system. Federal banking laws, which reflect the federal status of marijuana as an illegal drug, force legitimate marijuana companies nationwide to operate mainly in cash, as they are unable to access traditional financial services.

The resulting unaccountable cash only market has become a breeding ground for serious criminal activity including, but not limited to, money laundering, tax evasion, robbery, and theft. By passing the Secure and Fair Enforcement Banking Act, also known as the SAFE Banking Act, Congress would enable marijuana businesses to legally enter into the United States banking system. This necessary modification would increase transparency in the flourishing legal marijuana industry while deterring the spreading criminal activity that has developed in the absence of such supervision.

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The legal marijuana industry already employs hundreds of thousands of Americans across the country and is expected to increase in revenue to between $50 billion and $80 billion over the next 10 years. Federal law ensures that much of that revenue remains unaccounted for in the United States financial system by preventing marijuana companies from accessing bank accounts, credit cards, payroll systems, or business loans. In lieu of traditional banking, the business owners and employees are forced to hoard cash from cannabis sales, rendering the individuals as well as their communities vulnerable to violence and crime.

In 2018, one of the most successful marijuana infused product companies in the country was robbed in California. The thieves destroyed computers, trucks, and safes before making off with hundreds of thousands of dollars in cash. In 2016, a Marine Corps veteran who worked as a security guard at a dispensary in Colorado was murdered during an attempted robbery. The same year, a state licensed marijuana farmer drove to drop off a bag with $70,000 in cash to the Oregon Department of Revenue to pay his taxes. The lack of transparency and accountability in the legal cannabis industry constitutes a significant roadblock for both state and federal law enforcement officials hoping to effectively monitor this growing market.

Crucially, the SAFE Banking Act has measures that would update current United States policy to protect banks and other financial institutions from criminal prosecution for providing traditional banking services to legal marijuana businesses. This type of proposal, which addresses the grave risks posed by an industry of this size going largely unmonitored, has long enjoyed bipartisan support from state attorneys general. In 2017, I joined a coalition of 19 states attorneys general across the country from New York to North Dakota in urging Congress to pass similar banking legislation.

Now, the SAFE Banking Act, introduced by Representative Ed PerlmutterEdwin (Ed) George PerlmutterColorado governor says he won't sign bill that aims to increase vaccination rates without key changes Congress can open financial institutions to legal cannabis industry with SAFE Banking Act 20 years after Columbine, Dems bullish on gun reform MORE of Colorado, already has more than 120 cosponsors, including a dozen Republicans. By permitting legal marijuana businesses to operate in the financial system, the SAFE Banking Act and similar legislative proposals enable overdue transparency and accountability in the industry. These necessary changes would help account for billions of dollars already being spent on legal marijuana, paving the way for future regulation.

The SAFE Banking Act would give legitimate cannabis businesses more certainty and safety, while deterring criminal activity like organized crime and money laundering that flourishes without oversight. Though Congress may not be ready to consider legalizing marijuana outright, passing this bill would be a first step toward bringing this industry out of the shadows.

Karl Racine is the first elected attorney general of the District of Columbia. He is vice president of the National Association of Attorneys General and serves as co-chairman of the Democratic Attorneys General Association.