The U.S. Treasury Department has released its quarterly report, revealing that last year, over 830 financial institutions nationwide have officially acknowledged relationships with state-licensed cannabis businesses. According to a report from the National Organization for the Reform of Marijuana Laws (NORML), this number reflects a modest increase from the previous year and represents nearly double the number of banks and credit unions engaged with the cannabis sector in 2018.

However, despite this growth, fewer than 10% of all financial institutions in the U.S. currently provide services to the cannabis industry. The ongoing hesitation among banks stems from federal law, which classifies marijuana as a Schedule I controlled substance. This classification poses significant legal risks for banks, even when working with businesses fully compliant with state cannabis regulations.

Efforts to resolve the banking issue have repeatedly stalled in Congress. The U.S. House of Representatives has passed legislation seven times to protect financial institutions that serve cannabis businesses from federal penalties. Yet, the Senate has failed to advance these proposals to a floor vote, leaving the cannabis industry in a precarious financial position.

The lack of clear federal guidelines continues to deter many banks, exacerbating the challenges faced by cannabis businesses in securing banking services and investment capital. According to a survey by Whitney Economics, over 70% of cannabis operators cited limited access to banking and capital as their primary obstacle.

The absence of comprehensive banking reform disproportionately impacts smaller and minority-owned cannabis businesses, which often rely on traditional financing to grow and operate. NORML, the first cannabis advocacy group in U.S., has called on Congress to amend federal banking laws. "No industry can operate safely, transparently, or effectively without access to banks or other financial institutions. The players in this industry, particularly smaller and minority-owned businesses, and their consumers will remain severely hampered without better access to credit and financing," said NORML deputy director Paul Armentano.

The lack of federal legalization and banking access for cannabis has disproportionately impacted minorities and small businesses. Many entrepreneurs, especially from marginalized communities, face significant barriers to entry in the cannabis industry due to limited access to financial services, such as loans and credit. This forces many to operate in cash, increasing risks and operational difficulties. Additionally, the continued federal prohibition contributes to racial disparities in arrests and convictions related to cannabis, even as legalization spreads at the state level. Without full legalization and banking reform, these barriers hinder economic opportunities for minority business owners and perpetuate systemic inequities.

The SAFER Banking Act remains a key focus for cannabis advocates, who argue that it would provide the much-needed clarity and legal protection for financial institutions willing to work with the industry. The bill’s future remains tied to the broader debate over federal cannabis policy, and advocates continue to push for its passage to ensure safer, more equitable conditions for cannabis businesses across the U.S. For now, the limited participation of banks underscores the persistent legal uncertainty surrounding cannabis, even as the industry continues to expand across state markets.