Cannabis Banking in 2025: Trends, Challenges, and the Role of Fintech

The past few years have been nothing short of transformational for the cannabis industry. But from potential rescheduling to congressional inaction and several states’ inability to pass reform legislation during the 2024 election, there is still much to tackle in 2025.

Let’s take a look at how the banking landscape may shape up in the new year. From regulations and compliance and to state legalization and the growth of financial technology, this year is sure to be dynamic.

The Landscape

In 2025, banking and compliance will be influenced by several uncertainties, including federal rescheduling and recent political developments. The long-awaited Secure and Fair Enforcement Regulation (SAFER) Banking Act remains in limbo despite more than a decade of congressional consideration.

The likelihood the act will pass this year appears slim. While its passage would benefit the financial services industry, the urgency has waned. Years ago, SAFER could have eased the entry of financial institutions into cannabis banking significantly. Today, more than 1,760 banks and credit unions serve the sector, with many openly embracing the market and meeting regulatory expectations. Automation has reduced compliance costs and competition has grown, making it clear banking is viable even without SAFER.?

Compliance Challenges and Federal Uncertainty

A greater unknown is the potential impact of rescheduling. The timing and outcome remain unclear, as the Drug Enforcement Administration, which will make the decision, operates without a fixed timeline. But with complexities involving the Department of Justice and the Department of the Treasury and emerging controversies like the availability of intoxicating hemp products, significant progress in 2025 seems unlikely. Rescheduling may remain a possibility, underscoring the slow and intricate nature of federal policy changes.

Adding to the uncertainty is whether newly inaugurated President Donald J. Trump will make an impact (positive or negative) on federal cannabis policy. He exhibited cautious support during his campaign by extending his blessing to Florida’s failed attempt to legalize adult use, but he previously stated he favors continuing the state-by-state process in place now over federal descheduling.

In 2025, licensed operators will face significant compliance and financial challenges, requiring proactive support from financial institutions (FIs). Access to capital and funding constraints will remain critical hurdles, with FIs needing to enter the lending space to stay competitive by offering new loans and consolidating existing debt.

Additionally, the ongoing wave of mergers and acquisitions will bring heightened scrutiny of financial records and operations. FIs that position themselves as trusted partners will earn client loyalty but also contribute to the success of their partners, creating a mutually beneficial relationship.

The Role of Financial Technology

Financial technology (fintech) will play a crucial role in addressing the challenges faced by cannabis-related businesses (CRBs) and the FIs that serve them. As cannabis operators expand across multiple states, FI's must offer seamless multi-state banking solutions and consolidation services to support growth and provide a one-stop shop for financial needs. Those unable to adapt risk losing clients to competitors. Regularly re-evaluating and tailoring product offerings—such as depository, lending, treasury, and other commercial banking solutions—and integrating data will be essential to meet the evolving demands of CRBs.

To address compliance and security challenges, fintech solutions must prioritize integrated compliance as a default feature, leveraging the cannabis industry’s heavily regulated framework to deliver seamless, burden-free solutions. Keeping pace with the security and fraud landscape is equally critical, requiring advanced tools to safeguard individual accounts, detect transaction fraud, and address cash-handling vulnerabilities. Nascent technologies like artificial intelligence and machine learning will be pivotal in enhancing compliance, fraud detection, and operational efficiency while ensuring data quality and privacy remain uncompromised. Without the detailed data feeds that are needed, none of the above will be possible. Outcomes are based on inputs.

Ultimately, fintech must evolve into a full-service, customer-focused financial ecosystem. This includes integrated solutions for payment processing, lending, payroll, and tax-management, all designed to navigate the industry’s unique challenges, including high tax burdens, narrow profit margins, and significant regulatory costs. By fostering flexibility and? innovating with data-driven connections, FIs can build lasting partnerships with their cannabis clients and support the industry’s continued growth.

State-Level Banking Regulations

As for banking legislation, state-level initiatives are likely to continue leading the charge this year. States like Delaware have set an important precedent by adopting regulations to support financial institutions in serving the industry, recognizing the security concerns tied to cash-heavy operations. However, such legislation often coincides with major events, such as the legalization of medical or adult-use cannabis, rather than being retroactively addressed in states with established programs.

While some states may follow Delaware’s example, many are hesitant to tackle banking issues independently, relying instead on hope that federal reforms will resolve the challenges. However, the independent approach states historically have taken in defining compliant cannabis programs suggests they won’t wait for Washington to act.

As a result, the patchwork nature of banking legislation is expected to persist, maintaining barriers like the lack of interstate and international commerce, even as revenues and industry growth continue to increase at the state level.

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Kevin Hart founded Green Check to connect the cannabis and banking industries using technology that removes barriers and fuels business growth. Previously, he held C-suite positions in the software industry, where he led two companies to acquisition by publicly traded entities and a third to an initial public offering.