A coalition of 16 U.S. governors is urging Congress to pass federal marijuana banking legislation before the end of 2026, warning that the continued exclusion of state-licensed cannabis businesses from traditional financial services creates unnecessary public safety risks, economic barriers, and regulatory complications. Led by Maryland Governor Wes Moore, the group sent a letter to congressional leaders on November 9 calling for passage of the Secure and Fair Enforcement Banking Act, commonly known as the SAFE Banking Act. The legislation would provide federal protections for banks and credit unions serving legitimate marijuana businesses operating under state law, potentially ending years of financial uncertainty for an industry generating billions of dollars in annual sales.
The appeal arrives during a period of significant federal cannabis policy changes, including the partial rescheduling of medical marijuana and renewed congressional discussions about broader legalization. Despite the expansion of regulated cannabis markets across the country, many marijuana businesses continue encountering difficulties obtaining basic financial services, including checking accounts, commercial loans, electronic payment processing, and payroll management. The governors argue that bringing these businesses into the regulated banking system would reduce cash-related crime, strengthen financial transparency, and improve the ability of state governments to collect taxes and monitor commercial activity. Their intervention adds new political pressure to legislation that has repeatedly advanced through Congress without becoming federal law.
Maryland Governor Wes Moore Leads Coalition of 16 Governors
Maryland Governor Wes Moore organized the November 9 letter, bringing together Democratic governors from states with different approaches to marijuana legalization. The signatories include Colorado Governor Jared Polis, Connecticut Governor Ned Lamont, Delaware Governor Matt Meyer, Illinois Governor JB Pritzker, Kentucky Governor Andy Beshear, Maine Governor Janet Mills, Massachusetts Governor Maura Healey, Michigan Governor Gretchen Whitmer, Minnesota Governor Tim Walz, New Mexico Governor Michelle Lujan Grisham, New York Governor Kathy Hochul, Oregon Governor Tina Kotek, Virginia Governor Abigail Spanberger, Washington Governor Bob Ferguson, and Wisconsin Governor Tony Evers. Together with Moore, the group represents 16 states whose governments have encountered different aspects of the financial challenges associated with federally restricted cannabis commerce.
Moore, who also chairs the National Governors Association, emphasized that marijuana businesses operating legally under state law should have access to the same fundamental financial services available to other regulated industries. He argued that forcing businesses to depend heavily on cash makes dispensaries and their employees attractive targets for robbery while preventing entrepreneurs from easily obtaining loans or accepting conventional electronic payments. Although all 16 signatories are Democrats, the legislation they support has bipartisan sponsorship in Congress. Their letter emphasizes that marijuana banking reform does not require states to legalize cannabis or abandon existing restrictions, making it a narrower policy question than nationwide recreational marijuana legalization.
Federal Marijuana Restrictions Continue Creating Banking Problems
The central problem facing cannabis businesses involves the conflict between state legalization and federal controlled-substance laws. Although numerous states permit medical or recreational marijuana sales, federal law continues to restrict cannabis activity outside specific authorized medical programs. Financial institutions operating under federal supervision must consider potential legal exposure when handling revenue generated by activities that remain prohibited under the Controlled Substances Act. These concerns can affect banks, credit unions, payment processors, lenders, and other companies providing financial services, even when their prospective cannabis customers comply with every applicable state licensing requirement.
The consequences extend throughout the cannabis supply chain. Dispensaries may struggle to maintain checking accounts, cultivators can encounter difficulties securing financing for equipment and facilities, and manufacturers may face limitations when paying vendors or transferring money between businesses. Some financial institutions serve marijuana companies through specialized compliance programs, but these arrangements can involve unusually high fees, extensive reporting requirements, and restricted services. Business owners may also experience sudden account closures or difficulty finding replacement banking providers. The governors argue that these barriers undermine the effectiveness of state regulatory systems by placing legitimate commercial activity outside conventional financial channels.
Federal Report Confirms Cannabis Businesses Face Significant Financial Barriers
A September 2026 report from the U.S. Government Accountability Office provides substantial support for the concerns raised by the governors. The federal watchdog examined how banks and credit unions interact with cannabis-related businesses, reviewing regulatory requirements, financial institution practices, and experiences reported by business owners. The investigation found that marijuana companies continue encountering significant difficulties obtaining and maintaining financial services despite increased participation by some banking institutions. Challenges included account closures, expensive banking arrangements, limited lending opportunities, and restrictions on electronic payments. Several business representatives reported paying unusually high account fees, while others described commercial loans carrying interest rates exceeding 15%.
The report also found that approximately 1,000 banks and credit unions submitted marijuana-related suspicious activity reports during 2024, representing roughly 11% of federally insured depository institutions. However, that figure does not mean every reporting institution maintains regular cannabis business accounts. Some may have reported isolated transactions or relationships with companies providing services to cannabis operators rather than directly handling marijuana. The GAO concluded that ongoing legal uncertainty and compliance expenses discourage many financial institutions from entering the market. Its findings reinforce the argument that limited banking access remains a practical problem rather than simply a theoretical consequence of federal prohibition.
Cash-Based Marijuana Businesses Face Increased Public Safety Risks
One of the strongest arguments for passing the SAFE Banking Act involves the security concerns associated with cash-intensive businesses. Marijuana dispensaries often receive substantial amounts of physical currency because major credit card networks prohibit cannabis transactions and some banks decline to process payments connected to marijuana sales. Businesses must then store, count, transport, and deposit significant quantities of cash, increasing the operational burden on employees and security personnel. Large cash inventories can create attractive targets for burglary and robbery, while employees transporting money may face additional risks. Customers carrying cash to dispensaries can also become vulnerable to theft.
The governors argue that expanding access to banking services would reduce these risks by allowing more transactions to occur through regulated financial institutions. Electronic transfers, commercial deposit accounts, and reliable payroll systems could reduce the volume of cash circulating through cannabis businesses and simplify financial management. However, the availability of banking services would not automatically eliminate cash transactions or guarantee access to credit card processing. Payment networks maintain their own rules, and financial institutions would still decide which customers and services to accept. Nevertheless, supporters believe that removing federal obstacles would create opportunities for safer payment methods and reduce unnecessary exposure to cash-related crime.
How the SAFE Banking Act Would Change Federal Financial Regulations
The SAFE Banking Act of 2026 would establish a federal safe harbor protecting banks and credit unions that provide financial services to marijuana businesses operating in compliance with state or tribal laws. Federal regulators generally could not terminate deposit insurance, penalize institutions, or discourage legitimate banking relationships solely because a customer participates in an authorized cannabis industry. The legislation would also establish protections involving lending, financial transactions, and certain proceeds generated by state-sanctioned marijuana activities. These provisions are intended to reduce the legal risks that currently discourage financial institutions from working with licensed cannabis companies.
The proposed law also addresses businesses and individuals connected to the industry. Service providers supplying equipment, legal assistance, transportation, or other commercial support could benefit from clearer banking protections. Additional provisions concern mortgage eligibility for individuals earning income from lawful state cannabis businesses and access to financial services for qualifying hemp companies. However, the legislation would not require banks to accept marijuana customers, eliminate anti-money-laundering obligations, or authorize cannabis transactions that violate state law. Banks would retain responsibility for evaluating customers, verifying business legitimacy, monitoring suspicious activity, and complying with applicable financial regulations.
Bipartisan SAFE Banking Bills Remain Stalled in Congress
The current legislation was introduced in June 2026 through separate proposals in the House and Senate. Senator Jeff Merkley of Oregon introduced Senate Bill 4942 on June 24 with Republican Senators Lisa Murkowski of Alaska and Steve Daines of Montana, alongside Democratic Senator Elizabeth Warren of Massachusetts. The following day, Republican Representative Dave Joyce of Ohio introduced House Bill 9471 with a bipartisan group of lawmakers including James Himes, Warren Davidson, Nydia Velázquez, Brian Mast, Lou Correa, Guy Reschenthaler, and Dina Titus. Both measures seek to establish federal banking protections for financial institutions serving state-authorized marijuana businesses.
The latest proposals follow years of unsuccessful congressional efforts to address cannabis banking restrictions. Earlier versions of the SAFE Banking Act passed the House of Representatives multiple times, but none secured final approval from both chambers. In September 2023, the Senate Banking Committee approved the related SAFER Banking Act by a 14–9 vote, yet the legislation never received a final Senate floor vote. The 2026 bills have similarly encountered limited progress and had not received committee hearings as of November 10. With the 119th Congress approaching the end of its term, the governors are urging lawmakers to act during the remaining legislative session rather than allowing another version of the proposal to expire.
Marijuana Rescheduling Does Not Automatically Resolve Banking Restrictions
The governors’ letter arrives as federal officials implement significant changes to medical marijuana regulation. In April 2026, the Justice Department moved qualifying state-regulated medical cannabis activities and certain FDA-approved marijuana products into Schedule III of the Controlled Substances Act. Federal authorities subsequently began registering eligible medical marijuana dispensaries and developing new production controls. Although these changes provide a pathway for particular medical cannabis businesses to operate under federal authorization, they do not establish nationwide recreational legalization or resolve every banking challenge associated with marijuana commerce.
Even if broader marijuana rescheduling eventually occurs, financial institutions would remain subject to the Bank Secrecy Act and federal anti-money-laundering requirements. Banks must identify their customers, monitor transactions, report certain suspicious activity, and maintain appropriate compliance programs. The governors emphasize that banking reform and rescheduling address different problems and can operate alongside one another. Rescheduling changes how qualifying cannabis substances are classified and regulated, while the SAFE Banking Act specifically reduces legal uncertainty for financial institutions serving state-authorized marijuana businesses. Supporters therefore argue that Congress should not delay banking legislation while waiting for the federal rescheduling process to conclude.
Smaller Cannabis Businesses Could Benefit From Greater Access to Capital
Expanded banking access could have significant consequences for independent marijuana businesses and entrepreneurs entering regulated cannabis markets. Many smaller operators struggle to obtain affordable financing because conventional lenders are reluctant to accept cannabis-related collateral or provide loans to businesses operating under conflicting federal and state laws. Without access to traditional credit, entrepreneurs may depend on private investors, expensive alternative financing arrangements, or personal savings. These limitations can make it difficult to purchase property, expand facilities, upgrade equipment, or maintain sufficient working capital during periods of declining wholesale prices and increasing competition.
The financial barriers are particularly important for social equity programs intended to create opportunities for individuals and communities disproportionately affected by past marijuana enforcement. Obtaining a cannabis license does not guarantee access to the capital needed to establish a viable business, and entrepreneurs with fewer financial resources may struggle to compete against established companies. Banking reform could potentially expand financing options, encourage competition among lenders, and reduce some transaction costs. However, federal protections would not guarantee affordable loans or eliminate the financial challenges facing smaller operators. Lenders would still evaluate creditworthiness, profitability, collateral, and market conditions before approving financing.
Governors Say Banking Reform Would Strengthen Tax Collection and Oversight
The governors also argue that improving access to financial services would make cannabis businesses easier for state agencies to regulate. States with legalized marijuana markets collect substantial revenue through excise taxes, sales taxes, licensing fees, and other assessments. When businesses rely heavily on cash, tax collection and financial reconciliation become more complicated for both government agencies and regulated operators. Large cash payments require additional security, administrative procedures, and recordkeeping, while limited access to conventional financial services can create difficulties for government offices responsible for processing payments.
Bringing more cannabis transactions into regulated financial institutions could improve transparency by creating consistent electronic records and supporting existing anti-money-laundering monitoring requirements. The governors emphasize that banks already provide information to the Treasury Department’s Financial Crimes Enforcement Network through suspicious activity reporting systems. These records can assist authorized investigators in identifying unusual transactions and potential financial crimes. However, banking reform would not automatically give every state regulator unrestricted access to federal financial reports. Instead, supporters argue that increased participation in regulated banking would strengthen existing oversight mechanisms, improve financial accountability, and make it easier for government agencies to distinguish legitimate commercial activity from potentially unlawful transactions.
Cannabis Banking Reform Remains Separate From Federal Legalization
Despite the potential benefits, the SAFE Banking Act is not a comprehensive marijuana legalization proposal. It would not remove cannabis from the Controlled Substances Act, authorize recreational marijuana sales nationwide, or override states that continue to prohibit cannabis. The legislation also would not directly eliminate Section 280E of the Internal Revenue Code, which restricts ordinary business deductions for activities involving Schedule I or II controlled substances. Federal tax treatment and banking access are governed by separate provisions, meaning improvements in one area would not automatically resolve problems in the other.
The proposal also leaves some commercial uncertainties unresolved. Credit card networks could continue prohibiting marijuana transactions, financial institutions might maintain additional compliance requirements, and banks would not be obligated to offer loans or accounts to every licensed operator. Some financial industry representatives have indicated that broader federal legalization may be necessary before certain institutions significantly expand cannabis services. Others believe a federal safe harbor would provide sufficient clarity to enter the market. The GAO’s recent findings suggest that both perspectives exist within the banking industry, making the practical impact of legislation dependent on how individual institutions respond.
What Happens Next for the SAFE Banking Act?
With the congressional session nearing its conclusion, the governors’ November 9 letter represents an effort to revive legislation that has repeatedly failed to reach the president’s desk. Supporters hope the combination of bipartisan sponsorship, pressure from state executives, and evidence documenting financial access problems will persuade congressional leaders to schedule consideration of the pending bills. However, neither chamber has committed to advancing the legislation, and disagreements over federal cannabis policy remain substantial. If Congress does not approve the measure before the 119th Congress concludes, lawmakers will generally need to introduce new legislation when the next Congress convenes in January 2027.
The latest appeal illustrates how marijuana banking reform has evolved from a specialized industry concern into a broader question involving public safety, economic development, state regulation, and federal financial oversight. Governors responsible for administering different cannabis programs are increasingly emphasizing the practical consequences of requiring legitimate businesses to operate without reliable banking access. Although the SAFE Banking Act would not resolve every legal and financial challenge facing the marijuana industry, its supporters view the proposal as a necessary step toward integrating state-authorized cannabis businesses into the conventional financial system. Whether Congress acts before the end of 2026 remains uncertain, but the coordinated intervention by 16 governors adds significant pressure to one of the longest-running unresolved issues in federal marijuana policy.
