Why Cannabis Banking Deserves Another Look in 2026

Federal uncertainty remains, but the facts underlying the decision have changed. A risk assessment completed several years ago may no longer reflect the market, the policy environment, or the way a program can be structured today. It may also miss a commercial opportunity that other institutions are already pursuing.

The market has matured while banking access lagged

At the beginning of 2020, 11 states and the District of Columbia allowed adult-use cannabis. The National Conference of State Legislatures now counts 24 states, three territories and D.C. that allow or regulate non-medical adult use, along with medical-use programs in 41 states, three territories and D.C. Whitney Economics forecasts $30.5 billion in U.S. legal cannabis revenue for 2026, a projected 4.9 percent increase from 2025.

Banking access has expanded, but gaps remain. Many cannabis businesses now use a mix of cash, ACH, debit and other payment solutions, yet access to conventional banking services remains uneven across the industry. Their money also moves through landlords, accountants, law firms, contractors and other service providers that may already be customers of a community bank. Cannabis exposure can exist throughout a bank's commercial portfolio, including at institutions that have never approved a formal cannabis banking program.

Market growth does not make every cannabis operator an attractive banking customer. CRB Monitor counted 38,509 active U.S. cannabis business licenses in the first quarter of 2025, following a 13 percent contraction over the preceding two years. Price compression and uneven performance continue to affect the industry, making disciplined customer selection, local-market knowledge and sound underwriting essential.

For the right institution, cannabis banking can provide operating deposits and open the door to cash management, payments, payroll, treasury services and credit. These services can deepen relationships with cannabis businesses and with existing commercial customers whose work touches the industry.

Policy is active, consequential and unfinished

Federal cannabis policy has moved substantially in 2026, although important questions remain unresolved.

An April 2026 Department of Justice final rule placed FDA-approved drug products containing marijuana and marijuana subject to state-issued medical-marijuana licenses in Schedule III. The change is significant, but limited. Adult-use marijuana and marijuana activity outside the scope of the medical rule remain in Schedule I, and federal registration and control requirements continue to apply.

The rule also states that the Section 280E deduction disallowance will no longer apply to qualifying state medical-marijuana licensees. That matters because 280E has historically prevented many cannabis businesses from deducting ordinary business expenses, significantly increasing their effective tax burden. This may improve cash flow for some businesses and affect credit analysis, although tax treatment will depend on each business's facts, particularly when medical and adult-use activity are combined.

A separate federal proceeding addressing the broader rescheduling of marijuana from Schedule I to Schedule III also remains underway. The bipartisan SAFE Banking Act of 2026 remains pending in Congress with support from the American Bankers Association.

Hemp creates another immediate consideration. Public Law 119-37 narrows the federal definition of hemp effective November 12, 2026, unless Congress intervenes. ABA has warned that some CBD and hemp-derived products currently sold nationwide may fall outside the revised definition. Transactions involving those products could affect customers that a bank never considered part of the cannabis industry.

Taken together, the medical rule, broader DEA proceeding, SAFE Banking legislation and hemp changes make this one of the most active periods cannabis banking policy has seen. The outcome is still developing, but a cannabis banking risk assessment completed before these developments may no longer fully reflect the current environment.

The competitive position is being established now

The latest FinCEN data available, covering activity through December 2024 and released in 2025, identified 507 banks and 182 credit unions filing Marijuana Priority or Marijuana Limited SARs. Another 127 non-depository institutions were also filing these reports. SAR activity is not the same as operating a dedicated cannabis banking program, but it demonstrates that hundreds of financial institutions are already managing marijuana-related BSA obligations.

Institutions that serve the cannabis market build knowledge with every customer review, examination and regulatory interaction. They learn which customer profiles fit their risk appetite, which workflows need refinement and what resources are required as activity grows. They also become familiar to local operators, advisers and other businesses connected to the industry.

Those relationships can become difficult to displace. A cannabis business that has reliable operating accounts, cash management, payments, payroll and treasury services has practical reasons to keep those services together. Access to credit can strengthen the relationship further.

Credit can also create opportunities for institutions that want to deepen a relationship without taking on the full exposure. When a customer's financing need exceeds a bank's preferred hold size or cannabis concentration limit, a participation structure may allow the institution to meet more of that need while retaining the lead relationship and associated operating deposits.

A major federal change could bring more institutions into cannabis banking. New entrants will still need board approval, policies, legal analysis, staffing, training, and implementation. Institutions that begin this work after their competition will have less time to develop expertise and establish a position in their local markets.

Flexible infrastructure for launching and scaling a program

Several years ago, launching a cannabis banking program often meant creating specialized onboarding, due diligence, monitoring and regulatory reporting workflows across multiple departments. The bank also needed people who understood state licensing systems, cannabis business structures, source-of-funds review and the expectations surrounding marijuana-related suspicious activity reports.

Today, financial institutions can use specialized external infrastructure for selected functions or for much of the day-to-day operation. This gives a bank or credit union greater flexibility in deciding which responsibilities to staff internally and where outside expertise can add capacity and potentially limit risk.

Safe Harbor Institutional combines experienced personnel, technology-enabled workflows and cannabis-specific operating infrastructure. Institutions can use selected capabilities, work with Safe Harbor through a co-managed structure or choose a more comprehensive support model. Variable pricing allows service costs to align more closely with deposit levels.

That flexibility becomes increasingly important as a program grows. More activity means more onboarding, monitoring, license renewals, document collection and examination support. Scalable infrastructure can absorb part of that workload without requiring specialized internal headcount to rise at the same pace.

The financial institution retains the customer relationship, final account and risk decisions, ownership of its BSA/AML program, regulator relationships and overall program governance. Depending on the engagement, Safe Harbor supports or manages defined workflows under institution-approved policies.

Safe Harbor has supported financial institutions serving cannabis-related businesses since 2015. The company has processed more than $36 billion through regulated cannabis banking programs and supported operations in 41 states and territories. That experience gives institutions access to established workflows, experienced judgment and infrastructure that can expand with demand.

Public resources have improved as well. State licensing and reporting systems can support customer due diligence, although the quality and availability of information vary. The Conference of State Bank Supervisors' March 2025 examiner job aid provides a public view of questions state examiners may consider involving board oversight, program capacity, customer review, cash handling, reporting and contingency planning. FinCEN's 2014 marijuana banking guidance remains its published BSA guidance for financial institutions serving marijuana-related businesses.

A disciplined review using current facts

A financial institution can reassess cannabis banking without committing to launch a program. The review can begin with an inventory of direct and indirect cannabis and hemp exposure, an analysis of the licensed market in the institution's footprint and a review of potential customer segments. Management can speak with regulators, model the economics and evaluate the people, technology and processes required.

The institution can also assess which capabilities it wants to build internally and where experienced infrastructure could provide greater consistency or capacity. That analysis should consider program control, cost, staffing, scalability and examination readiness.

Some institutions will decide that cannabis banking does not fit their market or risk appetite. Others may find that the opportunity and the resources available to pursue it have changed substantially.

The important step is to make that decision using current information.