After a brief lull, more banks are starting to welcome cannabis companies
Even though it has not been officially approved by federal law, there are banks that are aware of the growth that the cannabis industry is having, and therefore continue to offer their services. According to recently released federal data, this trend has remained steady, and the number of banks and credit unions reporting working with marijuana businesses remained considerable over the last quarter. As time goes on, more banks will follow suit in order to respond to increased competition.
During the last three quarters of last year, those numbers had actually declined sharply, especially given the revised reporting requirements of the Financial Crimes Enforcement Network (FinCEN) and, not surprisingly, the severe economic impact caused by the COVID-19 pandemic. However, so far in 2021, things seem to be stabilizing again and the cannabis industry is once again getting that needed support from financial institutions. According to the report, as of March 31, a total of 684 banks and credit unions had filed reports indicating that they were working hand-in-hand with cannabis-related businesses.
Last year’s decline was not as alarming to many as it was understandable because FinCEN decided to no longer include hemp-only businesses in its quarterly reports. “The number of depository institutions (DIs) banking marijuana-related businesses (MRBs) appears to have stabilized from a decline that began at the end of the first quarter of the fiscal year 2020 (December 2019),” FinCEN said in its latest quarterly analysis. “The decline coincided with the issuance of guidance by FinCEN and financial regulators on the provision of financial services to customers engaged in hemp-related business activities.”
While it is true that the coronavirus was another major factor in the decline late last year, this has faded. As time goes on, the economy is beginning to resume a steady recovery.