Politics
Federal Agency Issues Update On Marijuana Banking Trends As Trump Weighs Rescheduling
Federal officials have released updated data on the number of banks reporting that they work with marijuana businesses–and most financial institutions don’t seem especially concerned with their cannabis clientele.
The Financial Crimes Enforcement Network (FinCEN), which falls under the U.S. Department of Treasury, has been publishing data for years about suspicious activity reports (SARs) related to marijuana-related businesses. This latest batch shows relative stability in the willingness of banks to service cannabis clients even under federal prohibition.
But notably, the portion of SARs identified as “marijuana limited” stands at 80 percent. That term refers to cannabis businesses that appear to be operating in compliance with state law and meet the agency’s standard for being serviceable under existing federal guidelines, as opposed to “marijuana priority” or “marijuana termination,” which indicate potential violations or account closures.
While there have been numerous calls for FinCEN to update its decade-old guidance on cannabis banking policy amid the ever-growing state legalization movement, that hasn’t happened. But even so, financial institutions have been increasingly willing to work with the industry over recent years.
As of the fourth quarter of Fiscal Year 2024, FinCEN reported that there were 816 banks and credit unions serving cannabis businesses. That slightly down from its peak of 831 financial institutions in the second quarter of that same fiscal year, but it’s significantly higher than during the early years of legalization when the agency started collecting this data.
This comes amid an ongoing push from bipartisan lawmakers in Congress to enact legislation protecting banks that work with state-licensed marijuana businesses. While there’s been limited movement on that reform so far this session, the industry is holding out hope that a pending proposal to more broadly reschedule cannabis could move the needle to normalize banking for the sector.
FinCEN has taken a much more detailed approach to its cannabis banking reporting in recent years compared to when it first started posting data, now providing insights about the types of SARs it has received and which states they come from. The agency’s spreadsheets now look back retroactively over a 10-year period dating back to the initial issuance of cannabis banking guidance in 2014 during the Obama administration.
State-by-state breakdowns of the data reveal wide disparities between the number of marijuana-related reports being filed by financial institutions in markets across the country.
For example, California led the pack with banks and credit unions filing 3,812 cannabis SARs in the quarter ending December 2024. Oklahoma, which has a medical marijuana system that’s allowed a massive proliferation of dispensaries, came in second with 2,735 SARs.
Colorado, the first state to enact adult-use legalization, had a relatively lower number, with 735 reports filed. Oregon had 424 SARs.
But as highlighted by the Canna Law Blog from the law firm Harris Sliwoski, one thing that stands out in the latest data is the portion of SARs that were categorized as “marijuana limited.”
Attorney Vince Sliwoski said that effectively means that the financial institutions are saying “Hey, FinCEN, here is a marijuana transaction!” and the agency “is doing jack-all about it.”
The state-based numbers are not a reflection of the number of banks that work with the industry, or the number of cannabis businesses within a given jurisdiction, as one bank could file multiple reports and some SARs are to note a termination of services. It is also the case that different financial institutions may have varying interpretations of FinCEN guidance with respect to when they need to file reports about marijuana industry clients.
FinCEN first provided the financial sector with guidance in 2014 that’s meant to help banks navigate the cannabis space while the plant remains federally prohibited. But advocates, stakeholders and lawmakers across the aisle have made clear that more needs to be done to normalize the sector and provide banks with certain assurances.
There’s still significant reluctance within the banking sector when it comes to working with businesses that involve a Schedule I controlled substance, and that’s reflected in the relatively low number of depository institutions that actually follow the guidance and take on cannabis clients.
There’s an expectation that, if President Donald Trump moves forward with a proposal to reclassify cannabis as a Schedule III drug, as opposed to its current Schedule I classification, under the Controlled Substances Act (CSA), it could make banks more willing to engage with the sector. A Schedule I classification wouldn’t federally legalize it, however, but it would let marijuana businesses take federal tax deductions they’re currently barred from under the Internal Revenue Service (IRS) code known as 280E.
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Meanwhile, during a House Appropriations Committee markup earlier this month, Rep. Betty McCollum (D-MN) criticized the exclusion of provisions to protect banks that work with state-licensed marijuana and hemp businesses from a key spending bill
Relatedly, a bipartisan coalition of 32 state and territory attorneys general from across the U.S. recently called on Congress to pass a marijuana banking bill to free up financial services access for licensed cannabis businesses.
The Democratic Senate sponsor of the marijuana banking bill recently said that, despite efforts to coordinate meetings around the legislation, other priorities have taken precedence for now.
Asked about recent comments from Sen. Bernie Moreno (R-OH)—the lead GOP sponsor of the SAFER Banking Act this session who told Marijuana Moment that he doesn’t expect the bill to come up until this fall—Sen. Jeff Merkley (D-OR) said, “Hopefully sooner than later in my mind.”
In January, the office of Rep. Dave Joyce (R-OH), who is again leading the effort on the House said, told Marijuana Moment that he would be filing the cannabis banking legislation this session but that its introduction was “not imminent” as some earlier reports had suggested.
