Nessel backs federal efforts to give marijuana businesses more banking options
Attorney General Dana Nessel is supporting federal legislation that would allow Michigan marijuana business to use the federal banking system.
Nessel announced Wednesday that she joined 38 other state attorneys general who have supported the Secure and Fair Enforcement Banking Act that would allow marijuana businesses to use the federal banking system in states where the industry is regulated.
Access to federal banking options eliminates the need for “under-the-floorboard safes” or other less secure measures to which pot businesses have been forced to resort in Michigan and elsewhere, Nessel said.
“Michigan's expanding its market to include legal recreational sales of marijuana this year compels us to join this effort to ensure we protect Michigan businesses from becoming unnecessary targets of bad actors, keeping everyone safe in the process,” she said.
More than 33 states and territories have legalized medical marijuana but the federal ban on the substance opens banks to federal sanctions if they do business with medical marijuana facilities, the National Association of Attorneys General said in a letter to Congress.
The SAFE Banking Act or other similar legislation would create a “safe harbor” for banks that would allow for better monitoring of pot sales and better enforcement of tax compliance, the association said.
“…regardless of how individual policymakers feel about states permitting the use of medical or recreational marijuana, the reality of the situation requires federal rules that permit a sensible banking regime for legal businesses,” the association wrote in the Wednesday letter signed by Nessel.
Some financial institutions in Michigan work with marijuana businesses, but don’t widely advertise the fact for fear of federal censure.
By U.S. Treasury standards, banks are expected to verify, review and understand business licenses and expected activities. Banks are required to report any suspicious activity to the federal government.
The Legislature last fall approved a law that allows the state to share with banks financial information for companies that authorize the disclosure. The real-time data about marijuana companies that may help them comply with federal laws requiring due diligence.
The state Treasury Department in February said it would look to add secure tax collection locations for marijuana businesses and work with Michigan-chartered banks to develop more secure processes.
As the state Marijuana Regulatory Agency works to stabilize and advance the regulated medical and recreational markets in Michigan, banking relationships with marijuana businesses are "critical" to success, said agency spokesman David Harns.
"That's one of the reasons why Executive Director (Andrew) Brisbo has taken a leading role in normalizing marijuana banking by facilitating relationships between licensees and financial institutions," Harns said.
Nessel’s support of the federal legislation comes the same week she announced a marijuana legal work group that will analyze Michigan’s marijuana law and make recommendations to state leaders on ways to better implement or clarify the rules. The work group includes municipal leaders, law enforcement, prosecutors, attorneys and the Bureau of Marijuana Regulation.
The group held its first meeting last month.
The group would work to avoid the "lawsuits, appeals and uncertainty that followed the enactment of Michigan’s Medical Marijuana Act in 2008,” Nessel said in a statement.