A record number of banks, credit unions and financial institutions are providing services to state-legal cannabis companies, according to recent statistics from the U.S. Treasury Department.
The agency’s Financial Crimes Enforcement Network – which tracks suspicious activity reports (SARs) filed by banks, and thus calculates the minimum number of banks working with marijuana companies – reported that 812 financial institutions had filed such reports in the second quarter of 2023, the highest number since FinCEN began tracking SARs in 2014.
That’s up from 807 in the first quarter of this year. It’s also something of a rebound from 2022, when the number of banks serving cannabis companies went down to a low of 773 from a peak of 806 banks in Q2 of 2021, according to the FinCEN data.
When FinCEN began tracking marijuana-related SARs in Q1 of 2014, there were only 54 banks reportedly working with cannabis companies.
The states with the top number of SARs filed – and thus likely the most number of cannabis-friendly financial institutions – include California with 3,757, Oklahoma with 2,531, Washington state with 1,970 and Michigan with 1,797.
At the other end of the spectrum with states that have functional marijuana markets were West Virginia with 7, Washington, D.C. with 15, New Hampshire with 17, Alaska with 30, Minnesota with 31, and Louisiana with 35.
The financial sector isn’t technically prohibited from working with state-legal marijuana businesses, but most larger banks have actively avoided the industry out of an abundance of caution, for fear of running afoul of anti-money laundering statutes and federal bank regulators.
The issue is one that some members of Congress have been trying to solve with the SAFE Banking Act for years, and now some U.S. senators are indicating the measure’s got solid chances in 2023, with a Senate Banking Committee vote slated for Sept. 27, MarketWatch reported.