More banks and credit unions are providing banking services to marijuana-related businesses, according to the Financial Crimes Enforcement Network.
The agency’s quarterly Marijuana Banking Update shows 553 banks and 162 credit unions were servicing the industry as of June 30, a total of 715 financial institutions. It said it received a total of 87,249 suspicious activity reports using key phrases associated with marijuana-related businesses, including “Marijuana Limited,” “Marijuana Priority,” and “Marijuana Termination.”
The jump represents a 61% increase in one year, according to Banking Dive writer Anna Hrushka. She suggests that some banks may be trying to get established early on with an industry that is expected to reach $41 billion in sales by 2025.
Learn more at NJBIA’s “What the New Marijuana Legislation Means for Business,” Nov. 6
“The public’s shifting attitude toward pot, in addition to bipartisan legislation, may also be encouraging some banks to take on the reputational and legal risks association with banking businesses related to cannabis, which is a Schedule 1 drug under federal law,” she writes.
Banking services remain one of the major stumbling blocks to legal cannabis businesses. Many operate on a cash-only basis, not just for sales but also with suppliers and service providers. Some even pay their taxes in cash.
Legislation is also making its way through Congress that would change the nation’s banking laws to allow for legal marijuana.
Thirty-three states, including New Jersey, have legalized medical use of the drug and 11 of them have approved recreational use of the drug. An effort to legalize recreational use of marijuana in New Jersey did not get enough support to pass this spring, but the Senate is expected to vote again on the measure this year after the November Assembly elections.