Attorneys General from 38 U.S. States and five Territories are calling on Congress to pass to the “SAFE Banking Act” that will allow legal marijuana businesses access to the massive U.S. banking system. SAFE stands for Secure And Fair Enforcement.

This bipartisan group sent a letter to congressional leaders Thursday, saying they want to move the $8.3 billion marijuana industry into the regulated banking sector where its money can be better monitored. They noted that many marijuana businesses transact in cash, making revenue tracking and taxation more difficult for states.

"Businesses are forced to operate on a cash basis," said the letter. "The resulting grey market makes it more difficult to track revenues for taxation and regulatory compliance purposes, contributes to a public safety threat as cash-intensive businesses are often targets for criminal activity, and prevents proper tracking of billions in finances across the nation."

Most states and several U.S. territories have legalized medical marijuana. Ten states and the District of Columbia have legalized adult recreational use of marijuana.

The letter calls on Congress to advance the SAFE Banking Act (and other similar legislation) and expand financial services to legitimate cannabis-related businesses and service providers while reducing the amount of cash they hold.

"Our banking system must be flexible enough to address the needs of businesses in the various states and territories, with state and territorial input, while protecting the interests of the federal government," wrote the attorneys general.

"This includes a banking system for marijuana-related businesses that is both responsive and effective in meeting the demands of our economy."

The SAFE Banking Act (H.R. 1595) is a proposed legislation regarding disposition of funds gained through the cannabis industry in the United States. Last March, it was advanced by the House Financial Services Committee for a vote by the full House of Representatives.

Sponsors of the bill are Ed Perlmutter (D-CO) and Denny Heck (D-WA). The bill received "broad bipartisan support" and there were 152 co-sponsors at the time of the committee vote, or more than a third of the entire House. Heck and Perlmutter have introduced similar bills in every Congress since 2013.

Perlmutter said support from state officials "underscores the need to respect states' rights on this issue and make our communities safer by allowing the marijuana industry and related businesses access to the banking system."

The banking industry gave H.R. 1595 a vote of confidence.

"The commonsense bill provides much needed clarity for banks in states where cannabis is legal," wrote the American Bankers Association.

As it now stands, banks refuse to maintain accounts for business engaged in the cannabis industry out of fear they might be prosecuted under federal money laundering laws. Federal law still considers marijuana illegal, which exposes banks to legal risk if they handle marijuana-related money or transactions.

"This is simple. Not incorporating an $8.3 billion industry into our banking system is hurting our public safety and economy," said California Attorney General Xavier Becerra, one of the signatories.

"The SAFE Banking Act would reward taxpayers and small and local licensed businesses who play by the rules. We urge Congress to pass legislation to meet the demands of our growing economy."

marijuana user
A man smokes marijuana during the annual 4/20 rally on Parliament Hill in Ottawa. Getty Images/Lars Hagberg/AFP

The letter was signed by attorneys general from Alaska, Arizona, Arkansas, California, Colorado Connecticut, Delaware, the District of Columbia, Guam, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, New Jersey, New Mexico, New York, North Dakota, the Northern Mariana Islands, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, Utah, the U.S. Virgin Islands, Vermont, Virginia, Washington, West Virginia and Wisconsin.