Chart of the Week: The Challenging Banking Climate for Marijuana Businesses

By Jennifer Mann

The difficulties dispensaries and recreational cannabis stores face on the banking front are well documented.

Although the federal government issued guidance early last year on how banks can work with the industry, the vast majority of financial institutions still keep marijuana companies at arm’s length.

Just 105 banks and credit unions service companies that sell cannabis, an official with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) said in a recent speech.

While that number is higher than many industry insiders expected, it’s still miniscule considering there are more than 13,000 such institutions – which operate more than 100,000 branches – in the country, according to federal data.

Between Feb. 14 and Aug. 8 of 2014, FinCEN received more than 1,000 Suspicious Activity Reports (SARs) from banks in the U.S. regarding activity with the legal marijuana industry. Of those, 123 indicated that one of the eight guidelines issued by FinCEN had not been followed.

Additionally, 475 SARs involved banks that terminated relationships with marijuana-related businesses.

But there’s good news.

The situation is starting to improve, as more banks are deciding to work with the industry – and even talk about it publicly.

And some of the nation’s more mature and advanced cannabis states have better banking access.

Eight of the 46 institutions represented by the Colorado Bankers Association, for example, reported doing business with the marijuana industry – or about 17%. A credit union specifically for cannabis businesses is also in the works in Colorado.

Clarification: An earlier version of this chart gave the incorrect impression that there are 100,000-plus banks and credit unions in the U.S. That figure reflects the number of branches of banks and credit unions.

6 comments on “Chart of the Week: The Challenging Banking Climate for Marijuana Businesses
  1. winston on

    Once again I direct cultivators and dispensers to South Porte Bank in Marion Illinois. Forward thinking directors that embrace the industry. They were present at the Las Vegas convention and will be in Chicago.

    Reply
  2. Paula Givens on

    South Porte Bank has formally implemented a cannabis risk management program and plans to openly bank cannabis related businesses. They are doing so using the Cannabis Risk Management Program of Industry Assurance and Oversight, LLC, written by me, Paula Givens, JD/CFE.

    If your cannabis business needs banking I can help.

    M Bank in Portland is also utilizing my program to service accounts in Oregon and Washington. M Bank is also opening accounts in Colorado. Colorado cannabis businesses who need banking may contact Guardian Data Systems to apply for an M Bank account.

    Reply
  3. RALPH MOY on

    My agency is apply for a license to producer medical cannabis in new mexico, as applications are open till May 1. but worry about not having needed start up financial

    Reply
  4. Alan123 on

    Looking for the same question to be answered…. Does anyone have any leads to any California banks that decided that they will open accounts for completely legal operations?
    Is there a list of cannabis friendly banks anywhere?

    Reply

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