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.
FinCEN (the Financial Crimes Enforcement Network), a division of the U.S. Department of Treasury that is responsible for enforcing financial crime, publishes data on suspicious activity reports (SARs), including those relating to marijuana businesses. The latest batch of data shows that banks are still willing to serve cannabis customers even though federal prohibition is in place.
The percentage of SARs that are classified as “marijuana-limited” is 80 percent. This term is used to describe cannabis businesses which appear to operate in accordance with the state laws and are serviceable according to existing federal guidelines. It differs from “marijuana prioritization” or “marijuana cancellation,” both of which may indicate possible violations or account closings.
FinCEN has not updated its ten-year-old guidelines on cannabis banking policies despite the growing state legalization movements. Despite this, the financial industry has been more willing to collaborate with cannabis over the past few years.
FinCEN reports that as of the fourth fiscal quarter 2024 there are 816 banks, credit unions and other financial institutions serving cannabis business. It’s a little lower than its previous peak of 831 in the second quarter that fiscal year but significantly higher than when FinCEN started gathering this information during the early legalization years.
It comes in the midst of a bipartisan push by lawmakers to pass legislation protecting banks working with state-licensed cannabis businesses. Although there has been little movement in this reform during the current session, industry leaders are hopeful that an upcoming proposal to reschedule marijuana more widely could help normalize banking.
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. In the agency’s new spreadsheets, they look retroactively back over the past decade since the first cannabis banking guidelines were issued in 2014.
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.
California, for example, led the way with 3,812 cannabis-related SARs filed by banks and credit unions during the December 2024 quarter. Oklahoma, where a system of medical marijuana has allowed for a large proliferation in dispensaries, ranked second with 2,735 cannabis SARs.
Colorado was the state that legalized adult-use first. It had 735 reported. Oregon had 424 SARs.
As highlighted in the Canna Law blog from law firm Harris Sliwoski’s latest data, the percentage of SARs classified as “marijuana-limited” is striking.
Vince Sliwoski of Sliwoski Law said, effectively, that this means the financial institutions say “Hey, finCEN, look at this marijuana transaction!” The agency is “doing nothing about it.”
These numbers don’t reflect how many banks work in the cannabis industry or how many businesses are located within each jurisdiction. A single bank can file several reports, and certain SARs must note the termination of service. FinCEN may give different guidance to financial institutions about when they must file reports on marijuana industry clients.
FinCEN provided guidance to the financial industry in 2014. The goal was to guide banks through the cannabis landscape while it remains illegal under federal law. Advocates, stakeholders, and legislators from both sides of the aisle agree that there is more to do to normalize this sector and give banks certain assurances.
Banking institutions are still reluctant to take on clients who deal with Schedule I substances.
It’s expected that if Donald Trump pushes forward with a proposed reclassification of cannabis to Schedule III, rather than its current Schedule I, classification under the Controlled Substances Act(CSA), banks may be more interested in engaging with the industry. Schedule I would not federally legalize marijuana, but it could allow businesses to take advantage of federal tax deductions that are currently prohibited under Internal Revenue Service code 280E.
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While a House Appropriations Committee marked up a major spending bill earlier in the month, Rep. Betty McCollum, D-MN, criticized its exclusion of protections for banks who work with licensed state marijuana and hemp businesses.
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 MEDCAN24 that he doesn’t expect the bill to come up until this fall—Sen. Jeff Merkley, a Democrat from Oregon said: “Hopefully sooner rather than later to my mind.”
In January, the office of Rep. Dave Joyce (R-OH), who is again leading the effort on the House said, told MEDCAN24 that he would be filing the cannabis banking legislation this session but that its introduction was “not imminent” as some earlier reports had suggested.
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