Editor’s note: This commentary is provided by the Medical Marijuana Education and Research Initiative (MMERI) of Florida A&M University.
The marijuana-legalization movement has spawned a booming industry that produces billions of dollars of cash every year. But finding a safe place to put all that money isn’t easy, as many financial institutions won’t touch funds related to a drug that remains banned by the federal government.
The state-level cannabis business is very cash-intensive, which some bigger banks don’t want to deal with. Meanwhile, community and regional banks have filled the void, says Joe Bour, Chief Financing Solutions Officer for First Federal Bank.
According to Mr. Bour, First Federal, located in Live Oak, Fla., provides banking services to the cannabis industry in Florida and other states where marijuana, whether for recreational or medical use, is legal. Medical cannabis is nearly a $2 billion-a-year industry in this state, with more than 25 active licensed operators.
A bill introduced in Congress in 2023 aims to help end the U.S. financial services industry’s reluctance to handle cannabis cash. The Secure and Fair Enforcement Regulation Banking (SAFER) Act would provide “protections for federally regulated financial institutions that serve state-sanctioned marijuana businesses.”
Reclassifying marijuana from a Schedule 1 to a Schedule 3 drug could also lower some of the barriers cannabis businesses face. The U.S. Department of Justice launched a proposal in 2024 to move marijuana to a less-restricted category. The proposed change to the Controlled Substance Act is now in the hands of a new administration.
Given the current conditions of marijuana banking, Mr. Bour suggests cannabis businesses partner with financial institutions that have a track record of supporting their industry. He also recommends working with attorneys and certified public accountants with backgrounds in the marijuana sector.
Visit https://bit.ly/MMERIFebruary2025 to watch MMERI’s Conversations on Cannabis Virtual Forum featuring Joe Bour and Jannon Forsythe discussing “Cannabis and Banking.”
