After more than a decade, Washington has largely figured out how to smoothly regulate its cannabis industry. 

The Washington State Liquor and Cannabis Board licenses producers, processors and retailers, and then ensures they’re in compliance with the rules. The Legislature adjusts laws when needed, and local banks and credit unions support about 460 dispensaries licensed throughout the state. 

However, since marijuana is still considered a Schedule I drug by the federal government, a classification on par with heroin, ecstasy and LSD, major credit card processors like Visa or Mastercard won’t allow transactions on the product. Plus, banks accepting funds that can be traced to these prohibited drug sales would be in violation of several laws, including the Controlled Substances Act and the Bank Secrecy Act, both passed in 1970. 

A 2018 Washington state law affirms financial institutions are not breaking any state laws by “receiving deposits, extending credit, conducting fund transfers, transporting cash or other financial instruments” from these businesses, but due to those federal restrictions customers in the Inland Northwest are mostly still paying cash. 

At local dispensaries, including Apex Cannabis, 4:20 Friendly, Lidz Cannabis, Locals Canna House, Lucky Leaf Co., Lovely Buds, The Vault, and Smokane, to name a few, all transactions are in cash. Each shop has ATMs that customers can use for a fee somewhere between $2.50 and $3.50 (not counting fees that may be assessed by customer banks for using an outside ATM). Customers at The Green Nugget locations have the option to go cashless via POSaBIT, a Seattle-based pay app meant specifically for cannabis retailers. At Cinder, customers can even use their debit card at the register for a $3.50 fee, and the transaction processes as an ATM withdrawal. 

Some businesses use this “cashless ATM” process to accept debit card purchases, Fortune reported in 2022. Pay apps similar to POSaBIT, such as CanPay, have become more common, too. 

FINANCIAL FOUNDATION

While it’s certainly notable that Washington and Colorado were the first states to legalize recreational cannabis in 2012, that distinction came with a lot of responsibility. 

It took two years before customers could walk into a dispensary and leave with some flower. Most of the delay was regulatory; practically overnight the Washington State Liquor and Cannabis Board, or LCB (previously known only as the Liquor Control Board), was tasked with overseeing an industry that had yet to exist anywhere in the country. 

Through 2013, LCB reviewed applications for three specific licenses — producers are permitted to farm cannabis, processors can package flower and turn raw product into concentrates, extracts and edibles, and retailers sell directly to customers — and defined the rules these businesses must abide by. 

On top of collecting licensing fees each year, the LCB is in charge of collecting the state’s 37% excise tax on all cannabis purchases. (Medical cannabis patients were made exempt to the tax at the retail level in 2024.)

In fiscal year 2025 (July 1, 2024, to June 30, 2025), the state collected $438 million from the tax, most of which went into the state’s general fund and basic health account. Since the state collected more than $555 million in fiscal 2021, a record high, that revenue source has been declining each year.

Justin Nordhorn, the director of policy and external affairs who has worked at LCB for nearly three decades, points to the cost of cannabis dropping as a contributor to the revenue numbers. 

“You’ll hear from industry members their concerns about the ‘race to the bottom,’” Nordhorn says. “As the prices are lowered, then you’re going to end up having lower tax revenue, because the tax revenue is based on the sale price of cannabis, so it’s not a flat rate. Whereas if you’re doing beer and wine, you may have liter taxes based on your volume.”

Although Washington’s legalization of recreational marijuana directed the LCB to oversee businesses’ compliance with financial regulations, the board cannot legally regulate banks and credit unions. 

“Early on, we didn’t really have anybody who was willing to bank with the cannabis businesses, and we were one of the first states, if not the first, that actually got some state banking,” Nordhorn says.

Overlapping federal and state regulations make cannabis banking about as clear as a gram of dabs (in other words, it’s muddy), but Nordhorn says three banks and three credit unions, including Spokane Valley-based Numerica Credit Union, stepped up early on to make sure licensed retailers weren’t left with stores full of cash to secure on their own. 

The board worked with these financial institutions in the beginning to ensure they were thoroughly informed of the federal and state regulations that came with offering banking services to cannabis retailers. 

“Eastern Washington stepped up early on in the Spokane area,” LCB spokesperson Brian Smith adds.  

TRAILBLAZING

Since the first dispensaries opened in 2014, Numerica has worked with cannabis-related businesses. Stephanie Stevenson, a spokesperson for Numerica, says community safety was a key factor in the decision to work with these companies. 

“As a largely cash-intensive industry, we recognized early on that cannabis businesses needed a secure place to manage their funds. As a local financial partner, we saw an opportunity to provide that stability while supporting a legal and growing part of our community,” Stevenson says via email. “Our focus has always been on supporting our members while helping reduce risk in our communities.”

In the beginning, the credit union largely offered basic deposit services for these weed shops to drop cash. But over time, Numerica began to offer more services, including “digital banking, ACH payments (including payroll and business to business), domestic wires, Remote Deposit Capture, and now lending options.”

(ACH, or Automated Clearing House, is the digital network that allows transfers between accounts, and a Remote Deposit Capture allows someone to scan a check and deposit it virtually.)

Stevenson did not answer many of our emailed questions, including which types of loans — a recently available service she touts as a “meaningful step forward” — are available at this time.

“Because cannabis banking is still shaped by federal and state regulations, there are some areas where we’re limited in what we can discuss,” Stevenson writes. 

Today, Numerica has about 300 “Canna Accounts” for businesses that operate in Washington and are in good standing with the LCB. While the options for these businesses have grown exponentially, there are still some roads yet to be traveled.

“The primary challenge remains that cannabis is still federally illegal, which limits access to services like credit card processing and certain financial products. These restrictions also increase compliance requirements and costs for both businesses and financial institutions,” Stevenson says via email. “While potential federal changes could help address some of these barriers, progress will likely depend on broader legislative action.”

Last month, the bipartisan CLIMB Act (House Resolution 7987) was introduced in Congress to prevent “federal agencies from taking any adverse action against a person solely because the person provides business assistance to a cannabis-related legitimate business.” 

The bill was referred to a financial services committee, but no action has been taken yet.