With the federal reclassification of marijuana still left in limbo, the complicated relationship between banks and the cannabis industry continues.

There are many federal restrictions that pose difficulties to dispensaries and other legal cannabis businesses; particularly when it comes to cashflow and overhead. Bound by illegality, banks may refuse to accept or process cannabis-related transactions. Similarly, receiving loans for startup costs or other financial needs tends to be restricted by major banks. Some health insurance and payroll companies tend to terminate relationships with businesses when they realize cannabis is being sold or produced. 

While you can purchase cannabis in Arizona with a debit or credit card, this often involves a third-party system that misrepresents the type of purchase made to an individual’s bank. Otherwise known as a cashless ATM, this has become commonplace in the cannabis industry. 

The boom of cashless ATMs in dispensaries reached an impasse of sorts last year. After Visa explained that the company would be monitoring transactions that the company considered fraudulent, the company sent secret shoppers to at least a hundred stores with cashless ATMs on-site; those of which were linked to Switch Commerce LLC, a payment processor located in Texas. 

But it wasn’t just Switch — Pueblo Bank & Trust (PB&T), which is based in Colorado, was cited as the bank involved with processing the transactions. Visa responded by imposing a $950,000 fine to PB&T; requiring $250,000 immediately; allowing repayment of the rest of the fine later. PB&T transferred both fines to Switch, who, seeking damages, filed a lawsuit against the national dispensary chain, Trulieve, alleging fraud, negligence, misrepresentation, conspiracy and unjust enrichment.  Switch claims that marijuana transactions were knowingly disguised as ATM transactions by Trulieve; despite knowing their federal illegality. Trulieve disagreed and claimed that both Switch and PB&T should be held liable for the fines. The lawsuit is currently pending. 

For cannabis business owners, the mangled nature of federal restrictions and business practices, requires a legal intervention that rescheduling wouldn’t fix. While rescheduling marijuana would broaden essential access to research and other scientific developments, along with allowing cannabis businesses to deduct business expenses on their taxes, legal experts assert that external legislation is needed to address issues such as debit and credit transactions, loans, and so forth. 

The Secure and Fair Enforcement Regulation (SAFER) Banking Act seeks to mitigate those issues. But the SAFER Banking Act has seen many versions of itself since 2010, all of which have been passed by the House of Representatives; only to lose steam in the Senate, despite bipartisan support.  

Recently, the SAFER Banking Act received support from 32 Attorneys General nationwide, who sent a signed letter to Congress expressing their support, linking federal guidelines to unsafe business practices in a legal market. Dispensaries resorting to cash-only policies, or skirting the law to use cashless payments, are both inherent risks. 

But who is the SAFER Banking Act designed to protect? Paired with a lackluster collective action, from both the federal and state-level governments, to expunge, support, and free those still impacted by cannabis-related charges, the focus remains rooted in profit. 

But there are other components of the cannabis industry that hinder success. As reported by the Arizona Center for Investigative Reporting in 2023, Arizona’s social equity program; which was intended to facilitate the ownership of cannabis establishments to community members impacted by the war on drugs, was infiltrated by corporate investors. A 2021 report from Business Insider found that 90% of cannabis business owners are white. Data from the American Civil Liberties Union found in 2020, Black Americans are 3.64 times as likely than white people to be arrested for marijuana possession. 

While limitations that cannabis businesses face are real and restrictive, it would be a disservice to ignore the other ramifications of cannabis prohibition. While federal arrests for marijuana are on the decline, most cannabis-related arrests exist at a state-level. 

But statewide data on marijuana-related charges is limited. Cannabis-related charges can range from violations of probation, a ticket instead of an arrest, or longer sentences because of prior cannabis charges. It’s complicated to gauge. 

Governors and the President alike can grant clemency to anyone still behind bars for cannabis related offenses. We don’t need to live in a world that punishes people for consuming cannabis. But we do.