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22 Governors Push for Cashless Bank Transfers for $20.3 Billion U.S. Weed Market

22 states in the U.S. wrote to Congress seeking protection of legalized marijuana businesses under the federal banking system.

A contingent of elected representatives on Wednesday pushed for legalized marijuana businesses to be protected under the national banking system in a bid to make them less vulnerable to crime.

Michigan Governor Gretchen Whitmer, Colorado Governor Jared Schutz Polis and 20 other state governors signed a letter asking Congress to pass the Secure and Fair Enforcement Banking Act.

The legislation would allow cannabis providers to make cashless transactions, potentially making them less vulnerable to violent assault and robbery when banking their business gains and expenses.

"Operating all-cash businesses poses an inherent danger for businesses in our state, and the SAFE Banking Act provides clear guidelines for our financial institutions to bank with these businesses,” Whitmer told ABC 12 News in an interview.

Last week it was reported that a draft bill known as the States Reform Act is proposing to officially make marijuana a regulated substance akin to alcohol, including adding a 3.75% excise tax.

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That news sent cannabis stocks soaring earlier this week before paring back some gains on analyst caution.

In a report issued in September, analytics firm New Frontier Data said global sales of high-THC cannabis through legally regulated sources totaled $23.7 billion in 2020, with the U.S. alone accounting for $20.3 billion of that total.

“Medical and recreational cannabis sales in the U.S. were estimated to total $17.5 billion last year, but because of antiquated federal banking regulations, almost all cannabis transactions are cash-based,” Polis wrote in a letter to Congress cited by Denver based FOX 31 in a local news report.

Sales in currently legal markets are forecast to exceed $50 billion by 2025, the report said, bolstered by expanding legal access and strong consumer demand.

Marijuana, which remains prohibited by federal law, has been approved for medical use in 36 states and the District of Columbia.