Resolution Urging Congress to Act to Provide Access to Banking and Insurance Services to Cannabis and Cannabis-Related Legal Businesses

Whereas, the American Legislative Exchange Council is not taking any position on the legalization of cannabis – medical or recreational, rather this resolution is focused on access to banking, insurance, and financial services in states that have legalized cannabis;

Whereas, despite being illegal at the federal level, cannabis is now legal in 33 states, the District of Columbia, Guam and Puerto Rico, covering 68 percent of the population of the United States;

Whereas, due to the conflict between state and federal law, the vast majority of financial institutions and insurers are unwilling to provide services and those that do could be subject to severe criminal and civil penalties;

Whereas, in addition to cannabis businesses being denied access to banking services, businesses that serve the cannabis industry, either directly or indirectly may be denied banking services simply because they are being paid with money derived from cannabis sales;

Whereas, lacking banking services, many legal cannabis businesses operate solely in cash, and cash-based systems are inefficient, expensive, opaque, and make illicit activity more difficult for law enforcement and state regulators to track;

Whereas, lacking access to insurance, many legal cannabis businesses are unable to obtain sufficient coverage for business risks, leaving consumers, employees, vendors, and owners without adequate financial protection;

Whereas, a bipartisan group of 38 Attorneys General have identified cash associated with the cannabis industry as a public safety concern;

Whereas, despite guidance from the U.S. Treasury Financial Crimes Enforcement Network (FinCEN) guidance to clarify Bank Secrecy Act (BSA) expectations, federal banking regulators lack the legal authority to provide banks a safe-harbor from federal law;

Whereas, the United States Congress has the sole authority to solve the cannabis banking and insurance issue by enacting legislation that provides protections for insurers, including surety bond writers, and depository institutions that offer financial services to cannabis-related legitimate businesses and service providers for such businesses;

Now, be it Resolved, that Congress should enact common-sense federal laws that respect state law and promote public safety without compromising federal enforcement of anti-money laundering laws against criminal enterprises.

 Approved By the ALEC Board of Directors: September 3, 2019