The Latest Scoop on Cannabis and Banking Laws in the USA

For years, state and federal laws on cannabis have struggled to come to good terms with each other. Most of the time the laws are in disagreement and it is hard to reach a middle ground. This means that cannabis lovers are constantly under the impression of getting busted by the feds. However, despite all the complexities, what is now a multibillion-dollar industry, is ready to enter a new era.

A few months ago the Senate took a major step and decided to join hands between financial institutions and the cannabis industry. The Safe Banking Act 2019 was passed by the House of Representatives on September 25th, 2019. This step paved the way for financial institutions and the banking sector to serve state-legal businesses without the fear of legal authorities. This also means that the cannabis industry is no longer under the surveillance of money laundering laws. And cannapreneurs can now use an effective banking system instead of carrying barrels of cash.

However, the current status of cannabis and banking laws still require a deeper analysis. Read on to learn about what is happening in the cannabis industry after the bill was passed. Also, we will understand how different state and federal laws cause conflict between the banks and the marijuana industry.

Conflict Between The Senate & The Cannabis Industry

Before we indulge ourselves in this deeper but complicated situation of the marijuana industry you need to first understand that there are several loopholes in the current cannabis laws. The bill still hasn’t been signed by Donald Trump. This good news is similar to a small ray of hope for the cannabis industry because there are two major roadblocks. First and foremost, drug policy activist and Senate leader Mitch McConnell have not given clear indications about the bills’ safe passage. Also, he does not share a cordial relationship with the Democrats.

Second, recognized social activists and many other House Representatives do not support this bill. They are of the view that this bill does not tend to the needs of individuals dealing with the problems of cannabis prohibition. And it is solely associated with the financial aspects of the cannabis industry. Given the current situation and contrasting opinions, National banks find it difficult to do financial business with the cannabis industry. So, this is the current political situation and now let’s discuss another aspect of the cannabis industry and the financial sector.

The problem faced by financial institutions

The problem between cannabis laws and the banking sectors arises from existing laws. There are different sets of laws for the state and federal level. The laws surrounding cannabis have gone through major amendments. Currently, 33 states have legalized medical cannabis and 11 states allow recreational use of marijuana. Although Nebraska, Idaho, and South Dakota still classify cannabis as illegal.

Interestingly, at the federal level, the case is entirely different. Cannabis may be legal on the state level but it is illegal at the federal level. This also means that in the eyes of federal law, both cannabis cultivation and possession are illegal. As a cannabis consumer, you might think that the state laws give you the independence to use marijuana legally. Unfortunately, the federal government has an upper hand in this matter. Especially the situation related to the financial aspects of the marijuana industry.

Let us look at this from a simpler perspective. We all know that everything related to the financial sector is eventually controlled by the federal government. So, anything that is associated with money or the U.S. dollar in totality will go under federal scrutiny. And cannabis is illegal at the federal level, making financial cannabis proceedings unlawful eventually.

Everything mentioned above is indicative of the fact that banks will stay away from the marijuana industry as long as this conflict persists. In addition to this, major National and state-level banks are answerable to the federal government. Because of this, they will not assist the cannabis industry. Even if in the worst-case scenario a bank tries to assist, the authorities on the federal level assume that the bank in question is trying to carry out illegal activities.

So, how does this situation affect the cannabis industry

Upon hearing the whole narrative you might think that how is this a big deal for Americans?

It’s common knowledge that the marijuana industry has faced several problems in the past few years. Well, this problem is affecting a lot of people, especially the people involved in the industry.

Given the fact that marijuana is appreciated for its therapeutic benefits, more people are now turning in favor of legalization. But Americans who directly or indirectly work for the industry have to face the repercussions of animosity between the state and federal laws. And all these people are looking for the same rights as other business owners have. Not only this, but the complexities in the current laws also affecting the economy of the country.

Anything connected with cannabis is illegal. This means that the banks are missing out on excellent financial profits. Especially from an industry that has flourished consistently in the past few years. Not only this but by doing so, the government is paving a safe way for illegal marijuana businesses. Marijuana users start buying their products illegally to avoid paying taxes. And so the situation for cannapreneurs is dicey and it definitely affects the life of people who are using cannabis to manage their chronic medical conditions. This is where state laws come to the rescue of these thousands of patients. Medical cannabis allows patients to get access to marijuana medicine. But you need to check with your state laws to see what your state allows the use of cannabis for medical purposes. You also need to check if your medical condition qualifies for the use of marijuana. For example, in LA 19 medical conditions and any other chronic symptoms related to these qualify for the use of medical cannabis. All you need to do is get a medical marijuana card in Los Angeles and you are good to go.

Final thoughts on banking laws and cannabis

If we look at the latest development that allows banks in the US to accommodate hemp businesses, it is safe to say that they will no longer restrain themselves from providing financial help to the hemp industry. They will treat hemp businesses just like other customers and this change does help the industry at large.

However, this is only helpful for people who deal with hemp directly and make clothes and hemp-based CBD products out of the plant. As far as cannabis products containing THC are concerned, there are likely negligible chances that both businessmen and bankers will open accounts or carry out transactions until the Safe Banking Act is under scrutiny.


Habit 420 is a Oregon Medical Marijuana Program participant for over ten years, a grower, and an activist. He believes cannabis has a unique place in our society and should be embraced for medical and adult use. To correspond with him, email him at

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