The Public Benefits of Banking Cannabis Businesses
Published July 19, 2019
As of early 2019, 33 states and the District of Columbia have legalized cannabis use in some form. These jurisdictions cover roughly 70% of the U.S. population. However, the possession, distribution, or sale of cannabis remains illegal under federal law. Because of the conflict between state and federal law, most banks will not provide services to the industry. This means that most cannabis firms and their suppliers are typically forced to operate in cash — posing heightened economic and security risks to customers, employees, and the larger community.
The problems caused by blocking cannabis and cannabis-related businesses from the banking sector are only going to grow as the cannabis industry expands. According to industry analysts, the legal cannabis industry now exceeds $10 billion and employs as many as 160,000 workers. Conservative estimates suggest that the legal cannabis market will grow to $25 billion by 2025, while more expansive projections have the industry reaching $75 billion by 2030. As a result, the industry is expected to create at least 300,000 jobs by 2020.
While the debate over legalizing marijuana continues, there are clear public benefits in allowing banks to serve cannabis businesses in the states where voters have chosen to make it legal in some form. This paper outlines some of those benefits.
