The Dilemma for Financial Institutions with Providing Services to Marijuana Businesses

Author: Margaret Williams, CAMS-FCI

The conflict between federal and state laws in the U.S. regarding the legality and use of marijuana has created a major dilemma for financial institutions. It has caused a serious debate about whether or not to provide services for marijuana businesses. Most are outright declining to do so. But how did this problem even start? Marijuana was not always categorized as an illegal substance.

In order to help the reader to better understand the cause of this problem facing financial institutions, a brief historical overview of marijuana regulation in the U.S. will be presented to help put things in perspective. Secondly, the federal government’s response to state initiatives seeking to decriminalize or legalize the use of marijuana will be addressed. Thirdly, what the federal government’s actions and resulting implications mean for the financial industry and marijuana businesses will be discussed. Lastly, some possible options or solutions that can help resolve this issue facing financial institutions will be examined.

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