Nevada’s marijuana industry has continued to grow, generating $100 million in tax revenue for the state with total sales of $530 million in 2019 alone. Unfortunately, while a growing number of states have moved to legalize recreational and medical marijuana, federal banking laws haven’t kept up.
Being that marijuana is still federally illegal, banks and other financial institutions have refused to provide services to people in the industry to avoid intervention from the federal government. Because these companies are prohibited from accessing traditional banking systems, they are forced to operate solely in cash. This creates a massive public safety risk for people throughout the state, particularly in communities of color. Business owners are required to pay their employees in cash and forced to keep large sums of money on-site. Meanwhile, government employees are forced to receive tax payments in duffel bags filled with cash, while armed guards stand by.
The current system isn’t working, and it’s only a matter of time until one of our neighbors is hurt or seriously injured. In 2016, Nevadans voted to allow recreational marijuana in our state. We have a responsibility to make sure this new industry is a safe as possible whether we like it or not.
State leaders have been working to address this problem by establishing a pilot program in the treasurer’s office to process marijuana-related transactions with a closed-loop system. Additionally, the attorney general’s office has been fighting to ensure that marijuana businesses are given the same rights and protections afforded to other businesses. However, the time has come for a federal solution to ensure that this growing industry can have access to banking services.
Last week, Nevada’s congressional delegation worked across the aisle to pass the Secure and Fair Enforcement Banking Act in the House of Representatives. This legislation seeks to reduce the amount of cash at marijuana businesses by ensuring equal access to financial services. Under the bill, federal regulators would be prohibited from taking adverse actions against banks and credit unions that provide services to marijuana business owners or their employees. Additionally, the bill provides that any proceeds from financial transactions related to legal marijuana won’t be considered as an unlawful activity.
Finally, the SAFE Banking Act has the potential to increase the number of women and minorities who are employed in Nevada’s marijuana industry. Under the bill, federal studies would be conducted to assess the barriers to entry into the market for women and minority-owned marijuana businesses. Recommendations for future legislation to reduce these barriers and incentivize growth would also be required.
Nevada Reps. Dina Titus, Susie Lee, Steven Horsford and Mark Amodei should be commended for co-sponsoring and supporting this legislation. Now it’s time for the members of the Senate to roll up their sleeves and get to work.
As constitutional officers, our top priorities are increasing public safety and fighting to protect the rights of all Nevadans. The SAFE Banking Act accomplishes both goals by making sure that folks who are employed at legal businesses aren’t discriminated against, simply because of where they work.
As Nevada seeks to lead the nation in regulating the marijuana industry, it is imperative that we find ways to increase access to banking and financial services. This will provide the industry with the tools it needs long-term growth, while also reducing the level of cash — so we can keep our community safe.
Zach Conine is Nevada’s treasurer. Aaron D. Ford is the state’s attorney general.