Cannabis Money and Public Banking

Cannabis, also known as marijuana, has been legalized in 34 states as of 2021. Each state varies on the degree of cannabis use and what is acceptable legal uses. Colorado was the first state in the United States of America to pass an Amendment for the legal use and possession of this substance. Many other states eventually passed into law to have cannabis legal. This legislation started the 9-billion-dollar industry of the sale of cannabis. Since cannabis is now legal for 34 states, it opened up a need for growing cannabis and sales of the new good. Having a successful cannabis business was not enough to flourish, and the lack of public banking for cannabis companies became a problem.


Federal law states cannabis is illegal, cannabis businesses did not have the right of access to banking practices in the United States. The federal law for banks to report any marijuana business that is in operation was still a federal requirement. The banks could not legally conduct any business with these companies. No bank was going to open up an account with a cannabis business. The need for the discretion of acceptable banking clients should be left to the state level, and this is exactly what the legalized states needed to fight for. The states would still have to investigate or conduct vetting on each cannabis company to make sure this is a legitimate enterprise before giving access to the banking system. Federal law enforcement and federal regulators have significant powers to punish institutions that do not comply with federal law. No bank will do business with a business that will produce federal problems.

Because the federal government will not allow cannabis into public banking, they are forced to deal with an all-cash system of business. An all-cash business comes with the risk of mistakes in keeping logs of all employee hours, paying employees, taxes to be withdrawn from their paychecks without an automated system, increased risk of robberies, and no direct deposit options. 


The House of Representatives decided to begin removing federal barriers by passing a groundbreaking and new legislation which would allow banks, in states where cannabis was legal, to operate bank transactions with the cannabis industry. This bill is called the Secure and Fair Enforcement (SAFE) Banking Act of 2019. This stops regulators from criminalizing banks and credit unions when working with cannabis companies. The vote for this bill was approved 321 for and 100 against. The House of Representatives after approving this bill sent it to the senate. Unfortunately, the senate has stalled the bill and there is no scheduled date for a vote of the SAFE Banking Act. Hopefully, the senate will approve this bill and it will be lying on the President’s desk for a signature. 

Big strides have been happening to give the public what they have been wanting for the cannabis industry to have access to public banking. The Secure and Fair Enforcement Banking Act of 2019 is a start in the great fight for the security of cannabis businesses getting the right to conduct business the way any other business has in America today. Banks can keep money safe and produce bank accounts, savings accounts, checking, direct deposit, money market, retirement accounts, and certificates of deposit. This list would improve cannabis businesses and increase profits.

Cannabis companies have discovered private financiers like venture capitalists and angel investors, which have stepped in to take over the financing problems that the cannabis companies are now facing. Maybe in the future, these types of companies that the federal government has deemed objectionable and illegal will have the opportunity to enjoy the rights that all the population of the United States enjoys.

Public Banking has ongoing changes in policy and daily banking procedures today. federal laws may change in the future and adapt to the billion-dollar business of cannabis sales. We will have to wait and see if these problems work themselves out.