A bipartisan group of state attorneys general is turning up the pressure on Congress to fix what they say is a dangerous flaw in federal banking law: the exclusion of legal cannabis businesses from basic banking services.
In a joint letter sent Thursday, attorneys general from both red and blue states urged lawmakers to pass the SAFER Banking Act, calling it a “critical” step in getting cannabis commerce out of the shadows and into the formal economy.
They’re not wrong. Even though cannabis is legal for adult or medical use in 38 states, it remains illegal at the federal level. That puts banks in a legal bind, and leaves legal weed businesses to operate on an all-cash basis. It’s a recipe for theft, tax evasion and serious headaches.
The SAFER Banking Act – Still Stuck in Limbo
It’s not the first time Congress has looked at this. The original SAFE Banking Act has passed the House seven times since 2019. But every time it’s made it to the Senate, it’s stalled.
The SAFER Banking Act — a slimmed-down update introduced in 2023 — aimed to finally change that. It got some bipartisan love in the Senate Banking Committee last year. Still, here we are in 2025, and the bill hasn’t even made it to a floor vote.
Now state AGs are jumping in, hoping their voices will help push it over the line.
Only a few AGs from prohibition states like Alabama and Arkansas were missing from the signatories. That silence was loud, but not unexpected.
Why It Matters More Than Ever
Let’s be blunt: forcing cannabis retailers to deal only in cash isn’t just inconvenient — it’s dangerous.
These businesses are frequent robbery targets. Cash-heavy storefronts attract crime, and employees are often put in harm’s way. Insurance premiums soar. Security costs eat into margins. And tax compliance? It’s a nightmare.
• In Oregon, a cannabis delivery driver was shot and killed in a 2021 robbery
• In Colorado, dispensaries lost over $1.5 million in cash from burglaries in just one year
• In Washington state, a budtender was fatally shot during a botched robbery attempt
“We are seeing a rise in violent crime associated with cannabis businesses,” Washington State Attorney General Bob Ferguson warned last year. “This is an issue of worker safety as much as it is about financial regulation.”
States Want Stability — And Tax Revenue
Here’s where things get complicated.
Even though states are raking in tax revenue from legal cannabis — over $4 billion in 2022, according to the Urban-Brookings Tax Policy Center — many can’t properly track transactions because so much of it happens in cash.
And for legal operators, working outside the banking system means no loans, no credit cards, no payroll systems. It’s like asking Amazon to run its business with a cigar box and a ledger.
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Several AGs noted that local and state governments are spending millions trying to regulate these businesses, but without access to the federal banking infrastructure, their hands are tied.
The result? A thriving black market, despite legalization.
Banking Access Could Be a Game-Changer for Small Operators
While some large cannabis firms have found workarounds — often by partnering with state-chartered credit unions or fintech startups — mom-and-pop dispensaries are left behind.
Take a look at how banking access (or lack thereof) affects different business sizes:
| Business Type | Has Banking Access? | Common Financial Risks |
|---|---|---|
| Large MSOs (multi-state ops) | Limited, workaround-based | High compliance costs, limited loans |
| Mid-sized dispensaries | Mostly cash-based | No credit, high insurance premiums |
| Small/local stores | Almost entirely cash | Theft risk, poor accounting systems |
For minority-owned businesses and first-time entrepreneurs, the banking blockade is often the final straw. Without basic financial services, they can’t compete.
Congress Faces Pressure — But Will It Act?
The political mood in Washington is complicated. Many Democrats back the bill, but some say it doesn’t go far enough. They want criminal record expungement and social equity measures attached.
Republicans, meanwhile, are split. Some, like Sen. Steve Daines (R-MT), support banking reform but oppose broader legalisation.
The AGs’ letter is a calculated attempt to cut through that noise.
It reads, in part: “This issue transcends politics. It’s about public safety, financial transparency, and protecting legitimate businesses.” That’s hard to argue with.
Yet the 2025 legislative calendar is packed, and election-year politics aren’t exactly known for nuance.
If the Senate doesn’t act soon, the SAFER Banking Act may become just another bill that couldn’t.
And the risks will keep growing.
Not just for cannabis companies, but for the communities they operate in.
And frankly, for Congress too.
So Who Didn’t Sign, and Why?
A few absentees stood out.
Attorneys general from Alabama, Idaho, Arkansas and a handful of other Republican-led states were nowhere to be seen. They’ve previously opposed federal cannabis reforms, citing concerns over youth access and federal pre-emption.
But critics say their absence ignores the reality on the ground.
More surprising was the silence from a couple of states where cannabis is legal — like Mississippi — but whose AGs are still holding out. Possibly due to politics. Possibly just inertia.
Whatever the reason, the letter now gives Congress a clear message: the states want action. Whether Washington listens, as always, remains to be seen.