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Cannabis and Banking: Implications for Missouri and Illinois


The regulatory landscape continues to change as the marijuana industry evolves and more states seek to legalize either medical or recreational marijuana use. In August, the National Credit Union Administration (NCUA) announced it won’t prohibit credit unions from providing services to the cannabis industry in states where it is legal, which now includes Missouri and Illinois. The NCUA position, however, does not supersede the authority of the Justice Department to potentially prosecute credit unions and banks that violate federal law by banking marijuana proceeds and, as such, risks remain for these financial institutions.

The National Association of Federally-Insured Credit Unions (NAFCU) has also announced that it will not take a position on the broader question of legalization or decriminalization at federal or state levels, but it does support legislative steps to provide clarity and legal certainty to the question of whether financial institutions may safely allow state-authorized marijuana-related businesses to have access to their services.

Hemp will remain regulated and states will hold the power of licensing and regulation with the assistance of the United States Department of Agriculture (USDA). As a part of the Hemp Farming Act that was signed into law in December 2018, hemp-derived products were removed from Schedule I classification under the Controlled Substances Act (CSA). The USDA plans to issue further regulations implementing the Hemp Farming Act.

Medical marijuana was passed in Amendment 2 in Missouri in late 2018, while it will become legal for recreational usage in Illinois on Jan. 1, 2020. Missouri is currently in the process of evaluating more than 2,100 applications for the state’s 348 medical marijuana business licenses. Currently, there are no credit unions banking marijuana business in Missouri, as most institutions are awaiting further guidance.

U.S. Congress is considering legislation related to marijuana banking that would impact financial institutions. In September, the House of Representatives passed the SAFE Banking Act, that provides a safe harbor to banks and financial institutions that work with state-legal marijuana businesses. The legislation faces more uncertainty in the Senate, where Majority Leader Mitch McConnell has been reluctant to bring up marijuana-related bills.

The SAFE Banking Act would allow cannabis businesses to access financial services that have historically been difficult to find due to the nature of often being legal in an individual state, but illegal federally. Marijuana-related businesses would be able to open accounts, take on loans, accept credit cards and deposit money into banks.

For more questions about regulatory developments related to cannabis banking, contact Lincoln Gray, Financial Services Industry Group Leader, at or 314.983.1235. For tax-related questions for the cannabis industry, please contact Rob Haggerty, Tax Partner and Cannabis & Hemp Industry Group Leader, at or 314.983.1311.


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