Alaska’s top state financial regulator is among 25 state and U.S. territory regulators who signed a letter Monday urging Congress to approve legislation easing the banking restrictions placed on legal cannabis businesses.
Cannabis businesses generally have to operate as cash-only because federal law considers cannabis to be an illegal drug. Banks are therefore reluctant to risk federal penalties for providing financial services to legal cannabis enterprises.
The letter to congressional leaders was signed by Patrice Walsh, director of the Alaska Division of Banking and Securities, and regulators from 23 other states and the U.S. territory of Puerto Rico.
“As of January 1, 2019, medical marijuana is available in 33 jurisdictions, representing 67% of the country's population,” the letter reads. “Nearly a dozen states have established adult-use marijuana programs and more states are likely to establish similar programs.”
The letter notes that cannabis businesses “face challenges establishing and maintaining stable banking relationships with financial institutions because of the risks posed to the institutions.”
“It is incumbent on Congress to resolve the conflict between state cannabis programs and federal statutes that effectively create unnecessary risk for banks seeking to operate in this space,” the letter reads. “The looming threat of civil actions, forfeiture of assets, reputational risk, and criminal penalties is not conducive to a legal, regulated marketplace.”
The letter’s 25 signers urge Congress to approve legislation that “creates a safe harbor for financial institutions to serve a state-compliant business or entrusts sovereign states with the full oversight and jurisdiction of marijuana-related activity.”
The letter was addressed to House Speaker Nancy Pelosi, Senate Majority Leader Mitch McConnell, Democratic leader Sen. Charles Schumer, and Republican leader Rep. Kevin McCarthy.