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.

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Weighs Rescheduling appeared first on Marijuana Moment.