State-sanctioned medical and recreational cannabis programs benefit the average user in many ways. Still, they remain a double-edged sword for dispensary owners, greenhouse growers, and others who earn their living from the cannabis industry. There are plenty of profits to be had, sure, but how exactly are you expected to secure your cash or process electronic transactions when banks refuse to work with you?
That is the question faced by many in the cannabis industry today, and, unfortunately, it does not really have a clear answer. While the U.S. government recently began the process to reschedule cannabis from Schedule I to Schedule III, the transition might not do much to ease the concerns of banks and other financial institutions once it’s all said and done. Even if it does have an effect, there’s still no telling how much time it will take until we start to see a difference.
A Legal Industry That’s Still Operating in the Dark
It’s been 30 years since California residents voted to pass the Compassionate Use Act, aka Proposition 215, to modernize the state-level medical cannabis movement, and many other states soon followed suit. The recreational cannabis movement is much younger, but it’s gained a lot of traction in several states over the past few years.
Although it’s still illegal on a federal level, individual medical and recreational laws have effectively legalized cannabis for millions of users across many different states. Nonetheless, most banks and financial institutions still refuse to work with businesses in the cannabis industry. Citing the fact that cannabis remains federally illegal, many banks, which must obey U.S. laws and regulations, still see cannabis-related profits as being gained through unlawful means.
It’s a short-sighted point of view that undermines the entire concept of state-level cannabis regulation, and it does nothing but push businesses into conditions similar to black-market operations of the past.
Not only is this model incredibly inefficient when it comes to taxation, financial transparency, and regulatory oversight, but it can be downright dangerous. Reverting back to black-market operations increases the risk of theft and violent crime. Moreover, it erases decades of progress that have been made for the various medical and recreational cannabis programs that are currently in place across the country.
Reform Efforts and the Slow Pace of Change
We are making strides in the right direction—even if they are few and far between. A bipartisan bill, originally known as the Secure and Fair Enforcement (SAFE) Banking Act, and, more recently, the Secure and Fair Enforcement Regulation (SAFER) Banking Act, was approved by the U.S. Financial Services Committee in 2019 and by the U.S. Senate Banking Committee in 2023. Unfortunately, the SAFER Banking Act is still awaiting a full Senate floor vote as of 2026.
Michigan Attorney General Dana Nessel, who recently joined a bipartisan coalition in support of the SAFER Banking Act, was recently quoted as saying: “By reducing the risk of crime and improving tax compliance through access to regulated financial services, the SAFER Banking Act has the ability to enhance both public safety and transparency. With billions in revenue, giving cannabis businesses a secure place to bank isn’t just smart policy – it’s common sense.”
According to a letter written by the coalition, retail cannabis sales in the U.S. exceeded $30 billion in 2024 alone. The cannabis industry currently comprises nearly half a million jobs across the country, and no less than 21 states are actively collecting tax revenues from cannabis-related businesses. But most of these businesses are still prohibited from using banks and other financial institutions.
While the SAFER Banking Act certainly improves the perception and investment potential of retail cannabis, some are concerned that the act wouldn’t do enough to fully resolve the current banking barriers faced by businesses in the cannabis industry.
The Rise of Alternative Finance
It’s an unfortunate reality that most large banks and financial institutions refuse to work with businesses in the cannabis industry, but it’s not entirely unexpected. After all, the U.S. government hasn’t really been receptive to cannabis cultivation, sales, or possession in years past. However, some business owners are finding their saving grace in smaller banks and specialized credit unions.
Salal Credit Union, for example, was one of the first financial institutions to come to the aid of the cannabis industry all the way back in 2014. Credit Union 1, the preferred banking partner of The Chamber of Cannabis, offers employee direct deposit, financing, cash pick-up/delivery, and much more. Finally, Honor Credit Union, based out of Michigan, has been serving the cannabis industry with checking accounts, debit cards, online banking, and other business services since 2019.
Although credit unions are a great option for cannabis professionals who don’t have anywhere else to turn, they do have some drawbacks when compared to traditional banking—including higher fees and interest rates, limited access to financial services, and a stricter compliance burden.
What’s in Store for the Future of Counterculture Banking?
Despite the growing mainstream acceptance of the cannabis industry as a whole, many business owners are still finding themselves excluded from the modern financial services that benefit other businesses in the United States.
Although some are optimistic about the changes that might come from the upcoming rescheduling of cannabis within the U.S., others see it as nothing more than a demonstrative act that won’t actually achieve much of anything. Either way, it’s still a long road to full-on legalization, and, as a result, financial institutions will still be able to pick and choose who they want to work with for years to come.
Need to learn more about navigating current banking and payment processing within the counterculture industry? Check out this article we recently published on the ongoing complexities, contradictions, and realities of modern banking in 2026.
References:
https://www.aba.com/advocacy/our-issues/cannabis
https://www.congress.gov/crs_external_products/LSB/HTML/LSB11218.web.html
https://www.salalcu.org/cannabis-friendly-banking/
