The number of financial institutions banking cannabis-related businesses has jumped 61% from a year ago, according to the latest Financial Crimes Enforcement Network (FinCEN) report.
The agency's quarterly Marijuana Banking Update shows 553 banks and 162 credit unions are servicing the industry as of June 30, a total of 715 financial institutions.
While the latest FinCEN figures represent a small fraction of the nation's financial institutions, the increasing number of banks and credit unions deciding to enter the space could mean more are viewing the industry as a growth opportunity rather than a risky venture.
The U.S.'s legal marijuana market is expected to reach $41 billion by 2025, according to data firm Nielsen, and some banks may want to get in early.
"The banks that I see that are [servicing the industry] are banks that are trying to grow," Jacques Santucci, founder and CEO of Strimo, a software platform for marijuana-related businesses, told Banking Dive in a previous interview. "They are fighting for the same dollar.… The way it's going, it's going to be a regulated industry, potentially very mature and potentially a commodity. The sooner you're in and the more loyalty you have, that will help grow your bank."
The public's shifting attitude toward pot, in addition to bipartisan legislation, may also be encouraging some banks to take on the reputational and legal risks association with banking businesses related to cannabis, which is a Schedule 1 drug under federal law.
A survey conducted by the Pew Research Center last year found 62% of Americans are in favor of legalizing marijuana.
Banks and credit unions may also be encouraged by what they are seeing in Congress, as legislation that would provide protections for financial institutions that service marijuana-related businesses in states where it's legal has received bipartisan support from lawmakers.
In a landmark vote, the House of Representatives passed the Secure and Fair Enforcement (SAFE) Banking Act last month. The bill now faces the tough task of winning over the GOP-controlled Senate.
However, several additions to the bill might make it more palatable to Republican lawmakers who have historically voted against legislation that favors the cannabis industry.
Lawmakers added clarification that the bill also applies to the hemp industry, in addition to language that prohibits a return of the Obama administration's "Operation Choke Point," a Justice Department-led initiative that investigated banks' ties to firearms dealers and payday lenders — industries believed to be linked to money laundering.