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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: WHAT MARIJUANA CAN LEARN FROM HEMPt JULIE ANDERSEN HILL* ABSTRACT 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. 1043

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