Nessel goes to bat for Michigan dispensaries stuck in the cash-only era

Michigan Attorney General Dana Nessel is calling on Congress to pass long-sought legislation that would let cannabis businesses access traditional banking services.

LANSING—Michigan Attorney General Dana Nessel is once again stepping up to support the state’s cannabis industry, this time with a renewed push to give dispensaries and growers access to the same financial services that every other business in Michigan already uses.

In a letter sent this month to congressional leaders, Nessel joined a bipartisan coalition of attorneys general urging lawmakers to pass the SAFER Banking Act—a long-delayed federal proposal that would allow banks to legally work with state-licensed marijuana businesses.

It’s not the first time Nessel has backed the legislation, which has stalled for two years under Republican leadership in Congress. But with billions of dollars in weed revenue flowing through the state’s economy—almost all of it in cash—she’s doubling down on the message: “Giving cannabis businesses a secure place to bank isn’t just smart policy. It’s common sense.”

Why can’t dispensaries use banks like other businesses?

Even though weed has been legal in Michigan for nearly five years, marijuana remains illegal at the federal level. And because just about all banks and credit unions are federally regulated, they’ve largely been unwilling to accept any deposits that are tied directly to cannabis sales.

That means just about all 850 Michigan dispensaries—plus hundreds of other cannabis cultivation and processing companies—have been restricted from opening checking accounts, applying for traditional loans or using credit card processing services. They can also face higher-than-normal banking fees if they can find a local credit union willing to take the risk.

Federal regulators issued limited guidance in 2014 allowing banks to work with cannabis businesses but only if they filed reports and complied with extensive rules under the federal Bank Secrecy Act. And for most banks, the burden (and risk) simply hasn’t been worth it. Nowadays, most cannabis businesses have few options but to operate almost entirely in cash.

What challenges does this create for dispensaries and growers?

Cash might sound convenient in theory. But in practice, it’s a logistical and legal nightmare.

Without access to traditional banking, most cannabis companies must store large sums of physical cash on site or transport it through private security services. That can make them easy targets for armed robberies and more vulnerable to fraud, theft, and internal mishandling.

Because banks have been reluctant to deal with cannabis businesses, they’ve also faced challenges applying for traditional business loans or lines of credit—leaving small shops, particularly those without personal capital or outside investors, especially vulnerable.

The rules have also reportedly resulted in employees of Michigan cannabis companies being denied home mortgages, student and automotive loans, and credit cards, all because they draw their income from a company that grows and sells weed.

Even state governments have felt the squeeze of federal regulation. Michigan collects tens of millions of dollars in cannabis taxes every year, but some regulatory agencies have reportedly been turned away when trying to deposit those payments at traditional banks, Nessel said.

How would the SAFER Banking Act change the game?

The SAFER Banking Act—originally introduced in 2023 by US Sen. Jeff Merkley (D-Oregon) and backed by dozens of Democrats and a handful of Republicans—would create new legal protections for banks and other financial institutions that choose to work with state-licensed cannabis companies. Merkley has been pushing some iteration of the legislation since 2015. 

It wouldn’t change marijuana’s legal status at the federal level, but it would give banks the go-ahead to begin accepting deposits, issuing loans, and processing payments for cannabis-related businesses in states where it’s legal—without fear of federal punishment.

Supporters say the changes would also dramatically reduce the need for cannabis companies to operate using cash only, improve public safety, make tax collection easier, and finally bring the cannabis economy into the 21st century.

Industry experts—and Nessel—have long supported the legislation. And with tens of billions of dollars in legal weed being sold across the country, the need for reform is as urgent as ever.

“Without access to traditional banking the cannabis industry is left as a ripe target for criminals,” Nessel said in a statement. “Any legal business should have fair access to our banking institutions for the security of their own business and employees as well as public safety.”

The bill passed a US Senate committee hearing in 2023, marking a rare moment of bipartisan progress in cannabis policy. But it never made it to the Senate floor for a full vote and a parallel version that was introduced in the US House also stalled out under Republican leadership.

What’s standing in the way of reform—and what comes next?

While President Donald Trump has publicly said he supports open banking access for cannabis companies, his Republican allies in Congress haven’t prioritized the issue. And with Republican House Speaker Mike Johnson calling an early summer recess amid pressure to release information about Jeffrey Epstein, it’s unclear whether this bill will resurface when lawmakers return to town in September.

Still, Nessel and dozens of her counterparts say they aren’t giving up. In their joint letter, they argue the SAFER Banking Act is common-sense, bipartisan, and urgently needed to protect public safety and allow cannabis businesses to grow responsibly within their respective states.

Joining Nessel in signing the letter this month were the attorneys general of Maryland, Ohio, Georgia, the District of Columbia, Alaska, American Samoa, Arizona, California, Colorado, Connecticut, Delaware, Hawai’i, Illinois, Maine, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Northern Mariana Islands, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, US Virgin Islands, Utah, Vermont, Washington, and West Virginia. 

READ MORE: 5 quick hits of cannabis news from across Michigan

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