Banking the Cannabis Industry
In 1996, California became the first state to establish a medical cannabis program, and in 2012, Colorado and Washington became the first states to legalize the adult use of recreational cannabis. To date, 18 states and the District of Columbia have legalized adult use of recreational cannabis with multiple other states legalizing medical-use cannabis. Yet the federal government is still debating sweeping changes. U.S. sales of recreational cannabis are anticipated to surpass $25 billion by 2025, with the industry employing more than 428,000 full-time workers. Financial institutions (FIs) choosing to provide banking services to cannabis-related businesses must address several unique risks, including offering payment services to clients operating in this industry. Even FIs not directly providing banking services to this industry need to understand its implications. This session will discuss the current state of this industry, and how financial institutions need to prepare for the future.