For years, the conversation around cannabis banking has centered around access. Banks won't serve the industry. Capital is limited. Reform will fix it. However, that framing misses the real issue. Cannabis doesn't have an access problem. It has an infrastructure problem.
Let's start with scale and complexity. Today, 40 states, three U.S. territories and Washington, D.C. allow medical cannabis, and 24 states plus three territories and D.C. allow or regulate adult use. This is no longer a niche market operating in one or two jurisdictions. The cannabis industry is now a national industry spread across dozens of distinct regulatory regimes. The economic footprint is real, too. A jobs report produced with Whitney Economics estimates $30.1 billion in legal U.S. retail cannabis sales in 2024, supporting more than 425,000 full-time equivalent jobs. So why does banking still feel stable in one market, yet fragile or entirely unavailable in another? Because even today, access is not the same as readiness.
Many institutions already serve state-legal cannabis businesses in some form. FinCEN's cannabis banking data for the second quarter of 2024 shows more than 800 banks and credit unions reporting active involvement with cannabis companies through required suspicious activity reporting. Yet these banks and credit unions are still a small share of the total U.S. depository ecosystem. In fact, at the end of 2025, there were 4,336 insured commercial banks and savings institutions and 4,287 federally insured credit unions. In other words, the question isn't whether some banks can serve cannabis. It's whether most institutions are built to do it safely, consistently and profitably at scale.
Much of the industry's hope has been placed on federal reform such as SAFE/SAFER-style proposals meant to reduce legal ambiguity for financial institutions serving state-legal cannabis businesses. That could be progress, but it's not the full story.
Cannabis sits at the intersection of state-legal commerce and federal prohibition. FinCEN's 2014guidance explains why that matters for banks. State laws do not change a bank's suspicious activity reporting obligations, and because cannabis remains illegal under federal law, transactions involving a cannabis-related business generally involve funds derived from illegal activity, meaning SAR expectations still apply even when a business is duly licensed and compliant. FinCEN also defined marijuana-specific SAR categories like "Marijuana Limited," "Marijuana Priority" and "Marijuana Termination," and listed red flags that demand continuous, risk-based diligence.
That complexity doesn't vanish with a new statute. Without purpose-built infrastructure, institutions are forced to retrofit conventional banking processes onto a fundamentally different risk and reporting environment. The result is inefficiency at best and compliance risk at worst. Too often, cannabis is treated like just another commercial vertical. It isn't.
Cannabis businesses face heightened scrutiny because the federal-state mismatch drives unique compliance demands. Many also operate in cash-heavy ways, not by preference, but because financial institutions may be unwilling to provide common banking products and services due to potential legal exposure, including under federal anti-money laundering laws. Congress's research has noted that this lack of banking access can push businesses into cash-only operations and create operational and safety concerns, including around tax collection when large volumes of cash must be handled.
They also face distinctive tax friction. Internal Revenue Code §280E disallows most deductions and credits for businesses trafficking in Schedule I or II controlled substances, which continues to affect state-legal cannabis businesses while cannabis remains federally prohibited. Regardless of where policy debates land, this is another way cannabis financials often don't resemble conventional small-business financials in other sectors.
So cannabis banking is not simply about opening accounts. It is about managing risk in a way that is continuous, documented and examiner-ready. It requires infrastructure. Over the past decade, a clearer model has emerged for risk-based workflows that meet regulatory expectations and align with how cannabis operates in the real world. At the center are three components.
First is onboarding. Financial institutions need structured, repeatable workflows to verify licensure, ownership and control structures, and the nature and purpose of the customer relationship before accounts are opened, while simultaneously nurturing the customer through the end-to-end process. Cannabis operators have choices, and you don't want to invest in onboarding customer accounts that never fund.
Second is ongoing monitoring. The FFIEC BSA/AML Examination Manual describes customer due diligence as risk-based procedures that enable banks to develop customer risk profiles and conduct ongoing monitoring to identify and report suspicious transactions and maintain and update customer information over time. In cannabis, that ongoing work is the program.
Third is audit and examiner visibility. Institutions must be able to demonstrate their compliance programs through clear documentation and transparent process trails, not scattered spreadsheets and ad hoc decisions. So leveraging bona fide systems that have been regularly tested by regulators is crucial. Building a cannabis program from scratch comes with the inherent human and system performance risks. The systems need to be designed correctly, people need to use the systems correctly, and the output of those systems needs to be interpreted correctly to mitigate regulatory risk.
When these elements are in place, cannabis banking becomes not only possible, but profitable and scalable.
The cannabis industry does not need more debate about whether banks should participate. Hundreds already do. What it needs is recognition that participation requires preparation.
Policymakers can help by reducing legal uncertainty. Financial institutions can also move forward now by teaming up with risk-based, examiner-ready systems rather than relying on manual workarounds, because access on its own is not transformation. Infrastructure is. When we talk about "systems," we're not just talking about software. It's the integration of regulatory expertise, cannabis domain knowledge and purpose-built technology working together to meet the precise demands of this highly regulated industry.
With the right foundation in place, financial institutions can operate with confidence, knowing they can scale programs profitably in a $34-plus billion industry, growing at more than 11% annually in the U.S. Cannabis banking isn't just viable; with the right infrastructure, it becomes a sustainable and strategic driver of growth.
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