Analysis of new federal data suggests more U.S. banks are warming to the possibility of servicing marijuana businesses in states where the drug is legalized, according to Tuesday (Jan. 2) reports in Forbes.
Data released by the Financial Crimes Enforcement Network (FinCEN) revealed in increase in the number of financial service providers working with marijuana businesses: Last January, there were 340 companies providing financial services to cannabis companies. By the end of September, that figure rose to 400.
Banks across the U.S. have been reluctant to service these companies because, while several states have moved forward to legalize marijuana, the drug remains illegal under federal law. Forbes noted that confusion about the federal government’s position on banking marijuana companies has also grown.
U.S. Attorney General Jeff Sessions is reportedly considering changes to policies pertaining to the industry, though he has opposed legalization of marijuana in the past.
In 2014, the Obama administration issued guidance for banks on how to service the industry without violating federal law. But according to reports, financial service providers remain reluctant to move forward with doing so. Among the guidelines includes a requirement for financial institutions to file reports on their business customers operating in the marijuana industry.
A separate document dubbed the “Cole Memo,” authored in 2013, also outlined criteria for states to implement their own regulations around marijuana without intervention from the federal government. AG Sessions testified in November that Obama-era guidances remain in effect, but subsequently said the Department of Justice is reviewing them with the possibility of policy changes.
Some states have considered their own legislative action to support the provision of financial services for legal marijuana companies that have largely been forced to deal solely in cash. Last November, reports in TheLA Times said California Treasurer John Chiang was exploring the creation of a state-backed bank to service marijuana companies. California voters legalized recreational marijuana last year, a policy that came into effect on Jan. 1, 2018.