While marijuana businesses often struggle to find banks that are willing to take them on as clients due to risks caused by the ongoing federal prohibition of cannabis, a new study found that banking activity actually increases in states that legalize marijuana. The research doesn’t make a direct connection between state-level marijuana reform and the increased activity, but it does strongly imply that there’s a relationship—even if the factors behind the trend aren’t exactly clear. Researchers set out to investigate banking trends in states that have legalized cannabis, looking at bank regulatory filings with the Federal Deposit Insurance Corporation (FDIC) from 2011 to 2016. They found evidence that “banking activity (deposits and subsequent loans) increase considerably in legalizing states relative to non-legalizing states.” That’s in spite of the fact that banks and credit unions run the risk of being penalized by federal regulators for working with businesses that deal with a federally controlled substance. “While uncertainty can result in overly cautious behavior and hinder economic activity, we do not find evidence of this with cannabis laws and the banking industry,” the authors wrote in the new paper—titled, “THC and the FDIC: Implications of Cannabis Legalization for the Banking System.”
Kyle Jaeger, Marijuana Moment, 01/21/2022 08:05:00