Several states that the Goosmann Law Firm attorneys practice in have enacted statutes allowing medical marijuana.

A few of those are Missouri, North Dakota, and Minnesota. These statutes allowing medical marijuana are technically in conflict with federal law.  There has been an add-on to federal spending bills called the Rohrabacher-Farr amendment which prohibits the Justice Department from spending funds to interfere with the implementation of state medical cannabis laws. 

There has been an effort to make the Rohrabacher-Farr amendment permeant through the Strengthening the Tenth Amendment Through Entrusting States (STATES) Act.  It was a bill that would recognize legalization of cannabis and the U.S. state laws that have legalized it.   However, this would not resolve the many financial issues that medical marijuana providers face.  Banks can hold accounts for medical marijuana providers, however they need to follow very specific guidance from the federal government.  The very few banks that do assist medical marijuana providers often charge high fees due to the additional oversight.

On September 25, 2019, the U.S. House of Representatives approved historic legislation to provide legalized marijuana businesses access to banking services. H.R. 1595, the Secure and Fair Enforcement Banking Act of 2019 or the SAFE Banking Act of 2019 (the “SAFE Act”).

If the SAFE Act were to be enacted into law, it would do the following:

  • Make it easier for cannabis-related legitimate businesses, along with their service providers, to access banking services and products, as well as insurance;
  • Prohibit federal banking regulators from engaging in certain actions against financial institutions, such as discouraging, prohibiting, or penalizing depository institutions that serve cannabis-related legitimate businesses;
  • Provide a safe harbor for financial institutions to offer their products and services to cannabis-related legitimate businesses and add protections for ancillary businesses, as well as specify how businesses on tribal land could qualify for the safe harbor provision;
  • Require the Federal Financial Institutions Examination Council (“FFIEC”) to develop uniform guidance and exam procedures to help financial institutions lawfully serve cannabis-related legitimate businesses.

The goal of the SAFE Act is to remedy the public safety risk for employees, businesses, and communities across the United States that have passed laws allowing for some cultivation, sale, distribution, and possession of cannabis for adult recreational or medical purposes, all of which are illegal under federal law. Because of this conflict of law, financial institutions that provide banking services to legitimate cannabis businesses licensed under state law are still subject to federal criminal prosecution and civil and regulatory action. As a result, many of these businesses operate on a cash-only basis.  There are only a few credit unions that will allow them to open business accounts.


With its passage by the House, the SAFE has been sent to the Senate where its prospects are mixed. To date there has been no action on the bill.  Senator Mike Crapo (R-Idaho), the chairman of the Senate Banking Committee, has signaled support for advancing H.R. 1595 by the end of the year.

Leader McConnell will likely take his lea from the President. While President Trump has never gone on the record favoring legalization of cannabis, he recently stated that he supports the rights of states to legalize cannabis. He may sign the SAFE Act if it were presented to him.

A number of the Democratic Senators who are seeking their party’s presidential nomination support legislation that would legalize cannabis entirely. They will undoubtedly play a role in the Senate’s consideration of the SAFE Act.

It would be a highly positive development for the continued growth of cannabis businesses for the SAFE Act to pass.  It would opening the door to credit card transactions, electronic fund transfers, and established banking procedures. However, these businesses will still face challenges with satisfying the diligence requirements that the SAFE Act and other existing regulations will impose upon financial institutions that work with cannabis businesses.


If your company filed an application to assist with medical marijuana in Missouri as a transportation, testing, cultivation, dispensary, or manufacturing facilitiy; the Goosmann Law Firm is happy to help you navigate the important process of implementing procedures to comply with Missouri regulations.  As mentioned above, the Rohrabacher-Farr amendment only limits enforcement if you are in strict compliance with state law.

This advice is not provided to avoid federal law, and all companies involved in the medical marijuana business should understand that their actions are still prohibited by federal law.

Angela Madathil is a Business, M&A, and Deal Attorney and provides legal assistance to medical marijuana providers and those providing ancillary services in Missouri, and Kansas.   This can involve reviewing loan commitments, loan documents, general contract review and negotiation, due diligence assistance, and post-sale integration.  The Goosmann Law Firm team advises to buyers and sellers of businesses, as well as business brokers throughout the Midwest and has attorneys licensed in Iowa, Kansas, Minnesota, Missouri, Nebraska, South Dakota, and other states.


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