September 23, 2019
The STATES Act Would Increase Public Safety by Allowing Cannabis-Related Businesses to Access the Banking System without Fear of Prosecution
WASHINGTON, D.C. – Attorney General Karl A. Racine today led a bipartisan coalition of 21 Attorneys General urging Congress to pass the “Strengthening the Tenth Amendment Through Entrusting States (STATES) Act” (H.R. 2093; S. 1028) or similar measures that would allow legal cannabis-related businesses to access the banking system. Current federal banking laws, which reflect the federal status of marijuana as an illegal drug, force legitimate cannabis companies nationwide to operate mainly in cash. The STATES Act would bring billions of dollars of existing cash transactions into the regulated banking sector, subject them to oversight, and reduce the risk of both violent and white-collar crime affecting the growing marijuana industry.
“Forcing legal cannabis businesses to operate only in cash leaves communities vulnerable to violence and crime,” said AG Racine. “Our bipartisan coalition is urging Congress to pass the STATES Act because it would allow those in the legal cannabis industry to access the U.S. banking system, provide long-overdue transparency and accountability, and deter criminal activity like robbery and money laundering. And, once Congress passes the STATES Act, I urge them to remove obstacles to the District of Columbia regulating its own cannabis industry.”
The legal cannabis industry in 33 states and several U.S. territories employs hundreds of thousands of Americans nationwide and is expected to generate revenue between $50-$80 billion over the next 10 years. Current federal law prevents banks from providing services to these state-regulated businesses, which forces them to operate almost entirely in cash and poses serious safety threats. In 2016, a Marine Corps veteran who worked as a security guard at a dispensary in Colorado was murdered during an attempted robbery. In 2018, thieves robbed a cannabis-infused product company in California, destroying computers, trucks, and safes before making off with hundreds of thousands of dollars in cash. The STATES Act would permit cannabis-related businesses in states and territories with existing regulatory structures to access the federal banking system and deter criminal activity.
The STATES Act has widespread, bipartisan support with 60 cosponsors in the U.S. House and 10 cosponsors in the U.S. Senate. AG Racine previously voiced his support for similar legislation in an op-ed in The Hill in March and in a letter to Congress supporting the “Secure and Fair Enforcement (SAFE) Banking Act.”
The full text of the letter is available at: https://oag.dc.gov/sites/default/files/2019-09/STATES-Act-Letter.pdf
The coalition of states and territories was led by District of Columbia AG Karl Racine, New York AG Letitia James, and Nevada AG Aaron Ford, and joined by Attorneys General from Alaska, California, Colorado, Connecticut, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Mexico, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington.
In addition to lack of access to the banking system, the District’s cannabis industry faces unique challenges. Congress has prohibited the District from spending money to enact or carry out any law, rule or regulation to legalize or reduce penalties for cannabis. AG Racine, along with Councilmember David Grosso, recently published an op-ed in the Washington Post urging Congress to allow the District to determine for itself how to regulate cannabis.
Content retrieved from: https://oag.dc.gov/release/ag-racine-leads-bipartisan-coalition-21-states.