Banking Cannabis

Abstract

Cannabis is no longer a movement. It is an industry estimated to be worth $50 billion as of January 2019. Currently, 46 states in the United States (the “U.S.”) have laws permitting or decriminalizing marijuana or marijuana-based products. Many of these states are enacting these marijuana legislative updates through voter-initiated referendums. More people than ever before are showing their support for legal marijuana by enacting the laws they want. These states are the laboratories of democracy for the cannabis industry. Despite the increased legalization of marijuana, marijuana-related businesses (“MRBs”) suffer from another obstacle hindering their growth: access to the federal banking system. This paper explores the financial institution regulations keeping cannabis as a predominately cash-only business and the limitations of using FinTech to solve the cannabis banking problem. Ultimately, this problem is one only Congress can solve.

Keywords: cannabis, marijuana, banking, FinTech, cryptocurrency, finance, Controlled Substances Act, money transmission, credit union