Medical and adult-use sales for cannabis in February— the first month in which cannabis could legally be sold for recreational purposes—hit $102.9 million. Sales this high secured Missouri third place in the rankings of opening month cannabis sales for all time.
The Show-Me State fell only behind California and Arizona for first-month cannabis sales, even with a smaller state population.
California legalized cannabis for adult and medical use in January 2018 and its total sales in the first month were $334.9 million. Arizona, which legalized cannabis for adult use in January 2021, had $109.8 million in first-month sales.
This year Missouri became one of 21 states, along with the District of Columbia, to have approved legalization of cannabis for both medical and recreational use. This means that an estimated 43 percent of the US population today lives in states that have legalized cannabis use, according to the Pew Research Center.
Attitudes are changing, too. In a 2022 Gallup poll, 69 percent of individuals surveyed said that cannabis should be legal. This puts acceptance dramatically up from just 31 percent who said the same in 2000.
Meanwhile, according to a February 2022 survey by the American Bankers Association, 65 percent of consumers support cannabis businesses being allowed access to banking services in states where cannabis is legal. In addition, 68 percent of consumers support Congress passing legislation that would allow cannabis businesses access to banking services and products in such states.
The US cannabis industry hit $26 billion in sales in 2022, according to a recent analysis by Cantor Fitzgerald’s Pablo Zuanic.
Arguably, the more interesting story is the growth potential for the industry. New Frontier Data estimates that should state legalization efforts progress as expected, cannabis could grow to a $72 billion business annually by 2030.
Experts note a shift in the size and reputation of banks that are now providing services to cannabis businesses. While it was once small banks that served this industry, often with under $1 billion in assets, larger banks are getting into the act, too.
And yet the numbers of “cannabis banks” remain small. As of September 30, 2021, 553 US banks and 202 US credit unions were actively providing banking services to cannabis-related businesses, according to FinCEN.
What might be of most interest to bankers is political momentum for the legalization of cannabis on the federal front.
On October 6, 2022, President Joe Biden asked the Secretary of Health and Human Services and the Attorney General to review how marijuana is scheduled under the Controlled Substances Act. Lawyers have speculated that if cannabis were reclassified so it no longer was deemed one of the most dangerous substances, access to banking for cannabis businesses would increase.
For many financial professionals, deciding to wade into cannabis banking hinges on getting some pressing questions answered. Banking cannabis today definitely means a financial institution must dot its “i”s and cross its “t“s from a compliance standpoint.
If you’re exploring the opportunities and risks of offering banking services to cannabis companies, RiskScout can help. Check out our Quick Start offerings from our expert advisory team to get started.