The cannabis industry continues to face a fundamental challenge: access to the regulated banking system. Despite legalization (adult use and/or medical) in dozens of states, cannabis remains federally illegal, leaving state-licensed businesses largely locked out of traditional financial services. This disconnect has created a cash-heavy environment, increasing risks for businesses, employees, and consumers. On July 24, 2025, a bipartisan coalition of 32 state and territory attorneys general—including those from major cannabis markets like California, New York, Arizona, and Oregon and newer burgeoning cannabis markets like Minnesota and Maryland—sent a powerful message to Congress: it is time to pass the SAFER Banking Act.
The Secure and Fair Enforcement Regulation (SAFER) Banking Act (the “Act”) is designed to resolve the persistent conflict between state and federal law that has had a chilling effect keeping cannabis businesses in the financial shadows. The Act, as currently drafted, would prohibit financial regulators from penalizing financial institutions that provide banking services to state authorized cannabis-related businesses. The bi-partisan group of attorneys general sought to communicate three points to Congress
- First, the attorneys general highlight the real-world consequences of the current cash-only status quo. When cannabis businesses are forced to operate outside the banking system, they become prime targets for robbery and other crimes. Employees and customers are put at risk, and law enforcement faces greater challenges tracking illicit activity. Moreover, state agencies struggle to collect taxes and conduct effective oversight when so much of the industry’s revenue is unbanked
- Second, the coalition claims that the lack of traditional banking inhibits the states’ ability to collect taxes or exercise meaningful oversight over the businesses within their jurisdiction. Nearly 75% of Americans now live in a jurisdiction where cannabis is legal in some form. Twenty-one states currently collect cannabis tax revenues, but many state agencies have been turned away by financial institutions when attempting to deposit cannabis-related payments. The inability to access banking services stifles economic growth, limits access to credit, and creates barriers to entry for new and diverse entrepreneurs.
- Third, the group noted that the Act has bipartisan support, is common sense, and does not encourage legalization on a federal level. “The SAFER Banking Act simply addresses the specific public policy challenges facing states in light of the federal prohibition on banking cannabis-related funds, and it does so in a way that will help move cash from legal cannabis businesses into the highly regulated banking system, where it will be more transparent to state regulators and law enforcement.”
Since 2019, multiple versions of the Act and its predecessor, the SAFE Banking Act, have advanced through various Congressional committees but have ultimately stalled before becoming law. The recent push by a bi-partisan coalition of state attorneys general could provide the momentum needed to help Congress move the Act across the finish line. Passage of this legislation would mark a major turning point and create substantial new opportunities for state-authorized cannabis businesses. These businesses should closely follow the bill’s progress and prepare for the significant changes its enactment would bring. The Act is currently awaiting a vote on the Senate floor, and we will continue to track its status as it moves through the legislative process.
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