According to a recent article in The Pew Charitable Trusts’ Stateline magazine, nearly all banks refuse to take money from marijuana sales because it is an illegal narcotic under federal law.
However, marijuana is legal in many states for medical, recreational, and research purposes, and this trend is growing. Even though the nation’s legal marijuana industry is expanding, most banks do not do business with growers, processors, retail shops, and medical dispensaries, or with their employees and contractors. The article cites the director of the U.S. Treasury’s Financial Crimes Enforcement Network (FINCEN) who stated that only 105 banks and credit unions, out of more than 100,000 in the country, take money from legal marijuana businesses.
Since legal marijuana remains a cash-and-carry business, the retail shops and dispensaries are targets for criminals. The article also states that some businesses are working with closed payment systems, in which a third-party middleman handles banking and bookkeeping to relieve some of the burden on the financial institutions. Some in the industry are hoping that Congress will act on this issue, the article says.
Last year FINCEN released guidance to clarify how financial institutions can provide services to marijuana-related businesses and comply with the Bank Secrecy Act. The department feels that the guidance should enhance the availability of financial services for marijuana-related businesses.