New York’s Office of Cannabis Management (OCM) recently took a significant step by creating a public resource for cannabis-related business (CRB) banking. This move is a rare acknowledgment by a state government of the crucial role financial services play in establishing and sustaining a healthy legal cannabis market—an issue that has been frustratingly overlooked for too long.
New York’s initiative follows in the footsteps of Vermont and California, which previously implemented a three-party agreement framework allowing cannabis businesses and the state to share information with financial institutions. However, while these efforts represent progress, they also highlight an ongoing challenge: transparency. The financial institutions listed in these public resources are self-reported, meaning many banks and credit unions that actively service the cannabis industry remain unlisted, either due to regulatory concerns or a reluctance to publicly disclose their participation. As a result, these lists, while valuable, provide an incomplete and somewhat distorted view of the true scope of cannabis banking availability.
State-level banking initiatives are an encouraging development, but they also underscore the need for broader reforms and more comprehensive financial solutions for cannabis businesses.
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The Use Case for State-Level CRB Banking Resource Lists
One of the biggest benefits of New York’s CRB banking resource is that it can help cannabis businesses avoid the false sense of security that comes with using big-name banks. It’s not uncommon to hear stories of cannabis operators managing to secure accounts at major financial institutions, often with the assurance of a local branch manager who “knows everything is fine.” But in reality, that situation is never truly stable. Eventually, the bank’s compliance team will catch on, and the account will be shut down. And let’s be clear—it’s not a matter of “if”; it’s a matter of “when.”
By compiling a list of financial institutions that explicitly serve the cannabis industry, the state is signaling an important message: cannabis banking is different, and businesses need specialized financial partners. These lists also indicate that the state recognizes the challenges of accessing cannabis banking and understands that removing these barriers is essential for the growth and success of its programs, especially those supporting social equity. Ensuring access to banking aligns with the state’s best interests.
Not every financial institution is a good fit for every business. Some banks only work with cultivators, others require businesses to have been operational for a certain period, and many only serve clients within a specific geographic area. Simply listing five banks doesn’t guarantee that any of them will be the right match for a particular CRB.
To make these lists more effective, states should work directly with financial institutions to clarify key details about their services and ideal customers. Instead of wasting time approaching banks that ultimately won’t accept them, the lists should include criteria such as: Does the financial institution only work with retail businesses, or do they specialize in growers? Does the bank serve plant-touching businesses? What about pre-revenue or pre-license companies? What are their eligibility requirements? By adding this level of detail, states can help CRBs avoid the frustration of pursuing banking options that won’t work for them and instead focus their efforts where they have a real chance of success.
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The Need for Social Equity in Cannabis Banking
State regulators have a lot on their plates, but banking is a fundamental issue that should not be overlooked. This issue is even more pressing when it comes to social equity programs. The reality is that many social equity applicants come from historically “unbanked” communities and lack access to private capital. In most industries, new business owners without generational wealth can turn to Small Business Administration (SBA) loans, but those aren’t an option for cannabis entrepreneurs.
Without banking and lending resources, how can these individuals realistically obtain a license and launch a successful business?
This is where many states fall short. They emphasize social equity initiatives and tout legalization as a step toward repairing the harms of over-policing, yet they fail to provide the financial institutions with the information they need to confidently bank the industry. States need to help educate entrepreneurs, many first-time business owners, on how to access capital and point them towards solid options.
Too often, social equity efforts amount to little more than lip service. To their credit, Michigan took proactive steps by involving its social equity education group in banking discussions, but there’s still a long way to go. The core problem is that states continue to underestimate just how critical banking is to the success of their cannabis programs, and that oversight is incredibly frustrating.
Some states, such as Kentucky and Vermont, explicitly mention banking in their cannabis regulations. While these requirements aren’t necessarily tied to social equity programs, they do acknowledge the need for financial infrastructure by mandating that businesses demonstrate access to a bank account or maintain funds in escrow. However, no state has truly connected the dots between banking access and social equity. This remains a significant shortcoming.
For social equity initiatives to be effective, they must go beyond license allocations and provide real financial pathways for historically unbanked entrepreneurs. Without dedicated efforts to ensure access to banking and capital, these programs risk setting up participants for failure rather than success.
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Lessons Other States Can Learn From These Early Adopters of State-Led Banking Resources
States should make cannabis banking resources readily available on their regulatory websites, providing businesses with clear guidance on where to find financial institutions willing to work with the industry. While some regulators may hesitate to list banks out of concern that it could be perceived as an endorsement, this can easily be addressed with a disclaimer—much like Vermont has done. Their website includes a section listing financial institutions that serve cannabis businesses, explicitly stating that the list is not an endorsement but simply a resource.
It doesn’t need to be complicated. At a minimum, states should provide a basic directory of available banking options. Ideally, they would go a step further by including details on the services offered and the types of businesses each institution serves. There’s no reason every state shouldn’t have a dedicated banking section on its cannabis regulatory website with links to reputable financial partners.
The Call to Action for Policymakers and Financial Institutions
Policymakers and financial institutions must recognize that banking is fundamental to the growth and sustainability of the cannabis industry, particularly for social equity businesses. States need to ensure that financial institutions have access to the necessary information to confidently bank cannabis businesses. Without it, banks cannot properly assess risk and, as a result, may choose not to participate in the market at all.
Some states, like Arizona, set a strong example by making essential licensing and compliance information publicly available. Arizona’s adult-use cannabis program provides financial institutions with details such as license status, contact information, hours of operation, and even past inspection reports, including any issues identified and whether they were corrected. This level of transparency reassures financial institutions that businesses are operating legally, reducing perceived risk and encouraging banking participation. No other state currently goes as far.
Additionally, financial institutions require basic operational data to bank cannabis businesses effectively, but broad statutory language in many states creates unnecessary barriers. While protecting sensitive information (such as patient data) is crucial, overly restrictive regulations often prevent banks from accessing even fundamental business details.
In Pennsylvania, for example, the state’s seed-to-sale tracking provider has refused to share any data with financial institutions, limiting banking access to just a few institutions statewide. The reluctance on the part of CRBs to share information, coupled with an insistence that the state won’t even allow any transaction data to be shared with financial institutions, has made the state far less attractive to banks and credit unions.
States should take a more balanced approach by clarifying what information financial institutions can reasonably request from cannabis businesses. Can they verify the date of birth for business owners? Can they review transaction-level sales data?
In short, states need to provide clear guidelines that will help financial institutions navigate compliance requirements while ensuring cannabis businesses have access to critical financial services. Will this occur in the near future? Only time will tell.
*This article was submitted by a guest contributor. The author is solely responsible for the content.