Cannabis Banking

Banks face challenges when offering banking services to state-authorized cannabis-related businesses, and these challenges are only going to grow without action by Congress.

Although almost all states have now legalized cannabis in some form, whether for medical or adult use, it remains illegal under federal law to manufacture, distribute, or dispense cannabis. The federal government still considers the proceeds of cannabis-related transactions to be generated by illegal activity. In 2025, Congress closed the hemp loophole, reclassifying a large part of the $28 billion hemp industry as marijuana. This means as of November 2026, millions of bank customers may be transacting in cannabis proceeds just by buying or selling the sleep gummies, beverages, vapes and creams that will be newly reclassified as marijuana.

Offering banking services to cannabis businesses operating lawfully in a state, but in violation of federal law, carries important risk to banks, but it is far safer for the U.S. financial system and American communities for banks to provide these services. Many state-licensed cannabis-related businesses transact in cash without using banks, raising risks to the surrounding community. Banks screen transactions for suspicious activity and report it, so it is safer for transactions to flow through the regulated financial system.

ABA believes the time has come for Congress and the regulatory agencies to provide greater legal clarity to banks operating in states where cannabis has been legalized for medical or adult use.

There have been a number of bills introduced in Congress that would provide protection for banks offering services to cannabis-related businesses without altering any federal prohibitions placed on cannabis. However, no final legislation has been adopted. These risks still exist after the President’s Executive Order on medical marijuana. Given nearly all states have legalized cannabis in some form, and we believe Congress should pass legislation that subjects the lawful proceeds of state-authorized transactions to the oversight of the regulated financial system, and achieves the legal certainty states, banks and businesses need to keep the U.S. financial system, and American communities safer.

President’s Executive Order on Medical Marijuana https://www.federalregister.gov/documents/2025/12/23/2025-23846/increasing-medical-marijuana-and-cannabidiol-research

In November 2024, when he was a candidate, the President expressed support for SAFER banking, and supporting states rights to pass marijuana laws. https://truthsocial.com/@realDonaldTrump/posts/113105431683796730

Proposals to Reschedule Marijuana https://www.dea.gov/notice-proposed-rulemaking-nprm

CRS Report on the 2025 marijuana law changes https://www.congress.gov/crs-product/IN12620