Cannabis Banking


  • ICBA advocates for federal legislation establishing an effective “safe harbor” from federal sanctions for banks that choose to do business with cannabis-related businesses (CRBs), including businesses that provide products or services to CRBs, in states where cannabis is legal under state law.
  • ICBA does not advocate for the legalization of cannabis.
  • As more states legalize cannabis for medical and/or recreational use, it is critically important that cannabis-related businesses (CRBs) have access to services provided by the traditional banking system.
  • Federal banking regulators should not be able to threaten or limit a bank’s deposit insurance, downgrade a loan made to a CRB, force a depository institution to cease providing banking services to a CRB, or take any other prejudicial action in a state where cannabis is legal, solely because the customer is a CRB.
  • ICBA opposes any effort by a state or municipality to establish a publicly owned bank or credit union to service the cannabis industry. Traditional banks are fully capable of serving this industry with the creation of an effective “safe harbor” to protect them from government or regulatory reprisal.


Cannabis is currently legal for recreational use in 10 states and the District of Columbia and for medical use in 33 states. According to a 2016 study by the Tax Foundation, a mature cannabis industry could generate up to $28 billion in tax revenues for federal, state, and local governments.

At the federal level, cannabis remains illegal under the Controlled Substances Act. As more states legalize cannabis and this segment of the business community continues to mature, the conflict between state and federal law creates increasingly significant legal and compliance concerns for state and federally chartered banks that wish to service cannabis-related businesses (CRBs) or continue to serve existing customers that may also do business with CRBs. Due to legal and regulatory uncertainty, CRBs lack access to the traditional banking system forcing them to operate mostly in cash. Cash-only businesses, especially those with a high volume of revenue, pose a significant risk to public safety.

While the Obama-era Departments of Justice and Treasury issued federal guidance for CRBs and financial institutions (DOJ’s 2014 “Cole Memo” and the Financial Crimes Enforcement Network’s 2014 FIN-2014-G001), the Cole Memo was later rescinded by then Attorney General Jeff Sessions. Further, most financial institutions found the initial guidance insufficient because it did not address the illegal status of cannabis under the Controlled Substances Act. This uncertainty creates a “whipsaw effect” that makes working with CRBs untenable for the majority of financial institutions in states where it is legal.

Given the disparity between federal and state law, community banks should not be placed at a competitive disadvantage with the establishment of a publicly-owned bank or credit union to service CRBs. Traditional banks, with the protection of a safe harbor, are fully capable of serving the banking needs of CRBs. Moreover, history clearly indicates that even public banks founded for narrow, specialized purposes inevitably expand beyond their original scope. Tax-subsidized credit unions and the Farm Credit System have expanded well beyond their original limitations and now compete directly with community banks. Once established, a state or public bank would advocate relentlessly for additional powers to assure its longevity and survival, to the detriment of private-sector competitors.

Staff Contact: Aaron Stetter, Steve Keen, and Lilly Thomas

Articles & Press Releases

Title Publication Date
ICBA Urges Senate Panel to Take Up Cannabis Safe Harbor NewsWatch Today Article 07/24/19
ICBA Announces 2019 Community Banking Policy Priorities Press Release, News 04/29/19
Community Bankers in Washington This Week Press Release, News 04/29/19
State Regulators Back Cannabis-Banking Bill NewsWatch Today Article 04/16/19
Cannabis-Banking Bill Introduced in Senate NewsWatch Today Article 04/15/19
Mnuchin Seeks Solution to Cannabis Conflict NewsWatch Today Article 04/10/19
ICBA Supports Committee Passage of SAFE Banking Act Press Release, News 03/28/19
Cannabis-Banking Bill Set for Committee Vote NewsWatch Today Article 03/21/19
Cannabis-Banking Safe Harbor Bill Introduced NewsWatch Today Article 03/11/19
ICBA Backs Cannabis-Banking Bill NewsWatch Today Article 03/11/19
Powell: Clarity on Cannabis Would Be Nice NewsWatch Today Article 02/26/19
ICBA Testifies on Cannabis-Banking Safe Harbor NewsWatch Today Article 02/13/19
ICBA Advocates Safe Harbor for Banking Cannabis Businesses Press Release 02/13/19
ICBA Testifying on Cannabis-Banking Safe Harbor NewsWatch Today Article 02/08/19
House Panel Meeting Next Week on Cannabis Banking NewsWatch Today Article 02/07/19

Letters to Congress

Title Recipient Date
Sens. Jeff Merkley and Cory Gardner
House Financial Services Committee
Reps. Perlmutter, Heck, Davidson, Stivers

Letters to Regulators

Title Recipient Date


Title Committee Presenter Date
Senate Banking Committee
Written Statement
Senate Banking Committee
Written Statement
House Financial Services Committee Subcommittee on Consumer Protection and Financial Institutions
Greg Deckard


Title Content Type Date