As more and more states begin to legalize marijuana, marijuana-related businesses such as dispensaries are cropping up all over the United States. Like most other legitimate businesses, marijuana-related businesses need a safe place to keep their money. However, unlike most other legitimate businesses, marijuana-related businesses often cannot find banks that are willing to do business with them. This is because banks are heavily governed and regulated by federal law, and marijuana is still illegal on a federal level—even where states have legalized its use. Although federal guidance on the subject has been issued, many legal “gray areas” continue to exist, making banks unwilling to take the risk of working with marijuana-related clients.

In order to solve this problem, several bills have been proposed to legalize some aspects of the marijuana business on a federal level. Such proposed bills include the SAFE Banking Act, which, had it become law, would have prevented federal regulatory agencies from punishing banks working with legally operating marijuana-related clients while fully legalizing such banking activities under federal law. However, this kind of piecemeal legislation has some serious flaws that would allow the federal illegality of marijuana to hinder the growth of marijuana-related businesses. A lack of protection for end users of marijuana products, the omission of provisions providing relief from a myriad of cumbersome regulatory paperwork requirements, and the bill’s failure to address the federal ban on marijuana research are just a few of the reasons that the SAFE Banking Act (and similar piecemeal marijuana legislation) would be much too narrowly tailored to accomplish its goal of aiding the growth of the marijuana industry by allowing banks to legally handle marijuana-related clients. Thus, complete legalization of marijuana on the federal level is the best path forward for banks and their marijuana-related clients.