Why California needs banking for legal cannabis operations
Despite the cannabis market growing in 38 states, the federal government continues to assert its right to classify cannabis as a Schedule I drug under the Controlled Substances Act. This classification creates a very unique challenge for the industry to succeed and the ability to obtain banking services.
The Controlled Substances Act makes the illicit possession, production and distribution of cannabis and other scheduled substances a federal crime and it punishes those who knowingly facilitate the violations of this Act. It is illegal for financial institutions to take money that is derived from activity that is deemed illicit by the federal government. Financial institutions are also heavily regulated by the federal government and are subject to fines and civil penalties if they violate federal laws.