Cannabis banking laws in the United States are currently in a state of flux. The conflict between federal and state laws regarding the legality of cannabis has created a challenging environment for financial institutions that wish to serve cannabis-related businesses.

Under federal law, cannabis is classified as a Schedule I controlled substance, meaning it is illegal at the federal level. This classification has made many banks hesitant to provide services to cannabis businesses out of fear of running afoul of anti-money laundering regulations and risking criminal prosecution.

However, as of 2021, a growing number of states have legalized cannabis for medical or recreational use. This has created a demand for banking services within the industry, as operating on a cash-only basis poses significant risks in terms of security and compliance.

In response to this need, some states have taken steps to create their own solutions to the banking issue. For example, California established the Cannabis Banking Working Group to explore options for providing banking services to cannabis businesses within the state.

At the federal level, there have been efforts to address the banking dilemma faced by cannabis businesses. In 2019, the House of Representatives passed the SAFE Banking Act, which would allow banks to serve cannabis businesses in states where it is legal without fear of federal prosecution. However, the bill has yet to pass the Senate and become law.

Overall, while progress has been made in addressing the challenges posed by conflicting federal and state cannabis laws, there is still much work to be done. The current status of cannabis banking laws remains uncertain, leaving many businesses in limbo as they navigate this complex regulatory landscape.