In July 2025, a bipartisan coalition of 32 state and territorial attorneys general (AG) sent a letter to congressional leaders urging the passage of the Secure and Fair Enforcement Regulation (SAFER) Banking Act. Their letter emphasizes that the legislation — a long-stalled federal reform — would provide legal clarity and a safe harbor for banks and financial institutions to serve state-licensed cannabis businesses. Such clarity, they argue, is urgently needed to address public safety risks and to improve the states’ ability to regulate and tax the booming cannabis industry.

The SAFER Banking Act: Legal Clarity for Ancillary Businesses

The core impetus behind the SAFER Banking Act lies in the array of problems caused by forcing a multibillion-dollar industry to operate on an almost entirely cash basis. Nearly 75% of Americans now live in a state where cannabis has been legalized in some form, and legal retail cannabis sales in the U.S. reached more than $30 billion in 2024 (up 4.5% from 2023). Yet, because of marijuana’s status as a federally controlled substance and associated federal banking restrictions, state-licensed cannabis companies today have limited or no access to traditional banking, resulting in an overwhelmingly cash-based industry. Legitimate cannabis entrepreneurs are often forced to pay employees and vendors in cash, store cash in vaults or off-site, and even pay taxes by hauling bags of currency to government offices. The cash-only mandate therefore not only creates a host of public health and safety concerns, but also undermines regulatory oversight and tax collection.

The SAFER Banking Act is designed to shield banks, credit unions, insurers, and other financial service providers from liability for simply providing traditional business services to state-sanctioned cannabis companies. In essence, it would create a “safe harbor” in federal law so that these ancillary businesses cannot be penalized for offering deposit accounts, loans, insurance, payment processing, and other services to legitimate cannabis-related businesses in jurisdictions where cannabis is legal. By providing a clear statutory safe harbor, the SAFER Banking Act aims to integrate state-legal cannabis commerce into the mainstream U.S. financial system. Importantly, the act does not encourage or facilitate the legalization of cannabis at the state or federal levels, and would not mandate cannabis sales in states that have chosen to keep the drug prohibited.

The push for cannabis banking reform has been building in Congress for nearly a decade. The original Secure and Fair Enforcement (SAFE) Banking Act was first introduced in the late 2010s and garnered broad bipartisan support, passing the U.S. House of Representatives multiple times (often by large margins) between 2019 and 2021. These earlier bills, however, ultimately stalled in the Senate. In 2023, lawmakers re-tooled and reintroduced the bill in the 118th Congress with some enhancements — rebranding it as the “SAFER” Banking Act. The extra “R” in the name signifies an added focus on regulation, and reflects additional provisions to extend protections to ancillary services like insurance and payment processors, and to reinforce requirements for financial regulators to serve all legal businesses fairly.

A Broad Bipartisan Coalition: 32 AGs United

One of the most striking aspects of the July 2025 letter is the breadth of its support among the nation’s top state law enforcement officers. Signatories include the AGs of states with established cannabis markets like California, Colorado, Illinois, and Maryland, as well as conservative-leaning states like Georgia, Ohio, Oklahoma, South Dakota, and Utah. This diversity underscores that access to financial services is not a partisan issue.

As their state’s chief legal officers, AGs are charged with upholding the law and protecting public health and safety. Their collective voice sends a powerful message to Congress that the status quo is failing at the state level — creating unsafe conditions and legal ambiguities — and that federal action is urgently needed to reconcile banking laws with state cannabis laws. This is not the first time state officials have sounded the alarm, as state AGs have sent multiple letters over the years urging federal cannabis banking reform. In May 2019, a bipartisan group of 38 AGs urged Congress to pass the original SAFE Banking Act, citing the public safety hazards of a cash-only industry. More recently, in September 2023, 22 state AGs wrote to Congress in support of the SAFER Banking Act as it advanced through the Senate Banking Committee. Such a broad consensus among state law enforcement leaders, from states with and without legal cannabis, highlights that this issue transcends typical political divides. The AGs collectively recognize that, regardless of a state’s stance on legalizing cannabis, refusing legitimate businesses access to banking serves no one — licensed businesses, regulators, law enforcement, or the public.

Why It Matters

For state-licensed cannabis companies, the stakes in this legislative effort could not be higher. These businesses, which now support more than 425,000 American jobs and counting, have been operating at a severe disadvantage by being denied access to basic banking services that other industries take for granted. The lack of access to checking accounts, electronic payments, lines of credit, and financing not only increases operating costs and security risks, but also hampers the industry’s ability to expand as a bona fide part of their state economies. The SAFER Banking Act promises to finally bridge the gap between federal law and the reality in more than 40 states and territories by removing the cloud of illegality from banking transactions with cannabis businesses.

The unified call to action by 32 AGs signals that state law enforcement leaders see this as a critical public safety issue, not a partisan or ideological question. Their letter makes clear that maintaining the status quo “presents a considerable safety issue for the public” and undermines state oversight. In their view, providing a federal safe harbor for cannabis banking is a pragmatic step that will make communities safer and governance more effective, without endorsing or expanding cannabis use in states that haven’t chosen to legalize.

Our Cannabis Practice provides advice on issues related to applicable federal and state law. Cannabis remains an illegal controlled substance under federal law.

Troutman Pepper Locke State Attorneys General Team

	Ashley Taylor – Co-leader and Firm Vice Chair Ashley is co-leader of the firm’s nationally ranked State Attorneys General practice, vice chair of the firm, and a partner in its Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He helps his clients navigate the complexities involved with multistate attorneys general investigations and enforcement actions, federal agency actions, and accompanying litigation.
	Clay Friedman – Co-leader Clay co-leads the firm’s State Attorneys General practice and is nationally ranked by Chambers USA for AG Government Relations and in Best Lawyers for Advertising Law. He has dedicated his entire career to state attorney general and federal work, serving for nearly a decade in a senior role and more than 25+ years in private practice. Clay focuses his practice on helping industry-leading companies mitigate the risks associated with state and federal regulatory investigations and associated litigation.
	Chris Carlson Chris advises clients on regulatory, civil, and criminal investigations and litigation. With a background as an assistant attorney general, he provides practical guidance to clients with matters involving state attorneys general and federal regulatory agencies.
	Lauren Fincher Lauren has vast experience handling state attorneys general investigations, navigating complex regulatory compliance matters, and providing strategic counsel in enforcement actions across various industries. She helps clients manage high-stakes regulatory matters and guides them through complex legal landscapes.
	Stephen Piepgrass Stephen leads the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, representing clients in single and multistate enforcement actions, including inquiries and investigations, as well as litigation involving state attorneys general and other state and federal governmental enforcement bodies. He has significant experience handling actions with federal agencies, including the CFPB and FTC, as well as single plaintiff and class action litigation for clients in highly regulated sectors such as financial services, health care, pharmaceutical, and education.
	Michael Yaghi Mike handles high-profile state attorneys general, FTC, and CFPB investigations by advising clients through these complex government inquiries. He assists clients through the entire life cycle of investigations, from regulatory enforcement through formal litigation.
	Samuel E. “Gene” Fishel Gene is a former regulator with two decades of experience who has overseen state privacy and cybersecurity regulation enforcement, led national, multistate attorneys general privacy investigations, and prosecuted computer crimes at the state and federal levels. He has served at the forefront of state attorney general and federal enforcement, and utilizes this experience to proficiently represent client interests.
	Jeff Johnson Jeff helps clients navigate complex regulatory and litigation challenges with local, state, and federal authorities. His clients benefit from his decade of broad litigation experience, understanding of emerging state and federal regulatory issues, and strong relationships with attorneys general across the U.S. In addition to handling cases from trial through state or federal appeals, Jeff serves as amicus counsel in advancing legal rules to support his clients’ vital interests.
	Jay Myers Jay assists clients in heavily regulated industries, including health care, energy, insurance, emerging industries, and data privacy. He provides both regulatory legal advice and government relations strategies. Jay’s past and current clients include Fortune 10 companies, startups, nonprofits, industry associations, and advocacy groups. Recognizing that state government matters are often complex and multifaceted, he utilizes regulatory guidance, government advocacy, or both in tandem to deliver tailored solutions for each client’s unique needs.
	Jessica Birdsong Jessica is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. She received her J.D. from the University of Richmond School of Law, magna cum laude, where she served as associate articles editor of the Journal of Law & Technology.
	Blake R. Christopher Blake collaborates with clients on matters related to government contracting, investigations, and disputes. His senior-level government experience generates valuable insights and strategies for clients across a variety of industries.
	Nick Gouverneur Nick is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. He received his J.D. from the University of Illinois College of Law, where he served as a member of the Journal of Law, Technology & Policy.
	Troy Homesley Troy is an accomplished litigator who has represented and defended clients across a wide range of complex, high-stakes disputes at both the trial and appellate levels. He has represented technology companies, business executives, law firms, investment funds, high-ranking federal officials, international non-profits, and asylum seekers. Troy draws on his broad litigation experience to advise clients before litigation arises, while claims are pending or threatened, and leading up to and through trial and appeals.
	Namrata Kang Namrata (Nam) is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, based in the Washington, D.C. office. She routinely advises clients on a wide variety of state and federal regulatory matters, with a particular emphasis on state consumer protection laws relating to consumer financial services and marketing and advertising. Nam’s experience transcends multiple industries, including financial services, telecommunications, media, and sports betting.
	Michael Lafleur Michael is an associate in the firm’s Regulatory Investigations, Strategy, and Enforcement Practice Group. Based out of the firm’s Boston office, Mike has deep experience in litigation, investigations, and other regulatory matters involving state-level regulators and state attorneys general.
	Philip Nickerson Philip represents clients in sectors such as financial, tech, real estate, and energy in a range of litigation matters. He is experienced in matters involving trade secrets, government investigations, commercial contracts, construction and product defect.
	Lane Page Lane specializes in federal and state regulatory investigations and complex civil litigation. He focuses on representing financial institutions and other businesses, with a particular emphasis on consumer protection and fair lending issues.
	Dascher Pasco Dascher is an attorney within the Regulatory Investigations, Strategy, and Enforcement practice, based in the Richmond office. She joined our firm after working in personal injury and medical malpractice for a Virginia trial law firm. Dascher brings varied legal experience to the firm with strong litigation and regulatory strategy capabilities.
	Kyara Rivera Rivera Kyara is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. She received her J.D. from the University of Richmond School of Law, cum laude, where she served as publications and online editor of the Public Interest Law Review.
	Timothy Shyu Timothy is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group.
	Trey Smith Trey focuses his practice on representing and advising regulated utilities before state public utility commissions. He routinely helps clients obtain certificates of public convenience and necessity for transmission infrastructure. In this role, Trey works with his clients’ subject-matter experts to manage administrative proceedings, including by preparing initial filings; responding to discovery requests; drafting rebuttal testimony; and litigating any disputed issues.
	Daniel Waltz Dan helps clients navigate all aspects highly regulated relationships between industry participants and federal, state and local governments. Whether engaging with regulators, negotiating transactions or representing clients in the courtroom, he delivers solutions that help his clients achieve their strategic goals.
	Cole White Cole is a member of the firm’s Regulatory Investigations, Strategy and Enforcement (RISE) group. He has a decade of experience working in the attorney general community, having joined the firm from the Wyoming Office of the Attorney General, where he was assistant attorney general.
	Stephanie Kozol Stephanie is Troutman Pepper Locke’s senior government relations manager in the state attorneys general department.