A new study examined how the legalization of cannabis at the state level affects deposits and lending activity of banks in legalizing states. After analyzing bank data over the course of several years, researchers have concluded that recreational cannabis legalization caused a spike in deposits and lending. Researchers collected data from more than 150,000 regulatory filings from banks across the country in states with legal marijuana between 2011 to 2016, finding a significant increase in deposits and lending after recreational cannabis was legalized. They found that in states with legal cannabis, bank deposits increased by 3% or 4% while bank lending increased from 6% to 8%, a small yet significant change. “We attribute this finding to either limited concern about the perceived riskiness of deposits surrounding cannabis legalization, or optimism that policies would be adapted to limit banks’ risks from regulatory uncertainty,” wrote the study’s authors.
Maria Loreto, The Fresh Toast, 01/25/2022 11:11:00
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