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101 B.U. L. Rev. 1043 (2021)
Cannabis Banking: What Marijuana Can Learn from Hemp

handle is hein.journals/bulr101 and id is 1055 raw text is: CANNABIS BANKING:
Marijuana-related businesses have banking problems. Many banks explain
that, because marijuana is illegal under federal law, they will not serve the
industry. Even when marijuana-related businesses can open bank accounts, they
still have trouble accepting credit cards and getting loans. Some hope to fix
marijuana's banking problems with changes to federal law. Proposals range
from broad reforms removing marijuana from the list of controlled substances
to narrower legislation prohibiting banking regulators from punishing banks
that serve the mar juana industry. But would these proposals solve marijuana's
banking problems?
In 2018, Congress legalized another variant of the Cannabis plant species:
hemp. Prior to legalization, hemp-related businesses, like marijuana-related
businesses, struggled with banking. Some hoped legalization would solve
hemp's banking problems. It did not. By analyzing the hemp banking experience,
this Article provides three insights. First, legalization does not necessarily lead
to inexpensive, widespread banking services. Second, regulatory uncertainty
hampers access to banking services. When banks were unsure what state and
federal law required of hemp businesses and were unclear about bank
regulators' compliance expectations for hemp-related accounts, they were less
likely to serve the hemp industry. Regulatory structures that allow banks to
easily identify who can operate cannabis businesses and verfy whether the
business is compliant with the law are more conducive to banking. Finally, even
with clear law and favorable regulatory structures, the emerging cannabis
industry will still present credit, market, and other risks that make some banks
hesitant to lend
t © 2021 Julie Andersen Hill.
* Alton C. and Cecile Cunningham Craig Professor of Law, University of Alabama School
of Law. I am grateful to Sam Kamin, Benjamin Leff, Lauren Newell, and David Webber for
their helpful engagement with the ideas in this Article at Boston University Law Review's
Symposium, Marijuana Law 2020: Lessons from the Past, Ideas for the Future. I also
appreciate comments provided by Michael Hill and Ron Krotoszynski.

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