Cannabis distribution operators in the U.S. navigate a complex and uncertain terrain when it comes to banking and payments. Despite roaring growth—U.S. legal cannabis sales hit over $31.4 billion in 2024, with projections suggesting nearly $45 billion in 2025—the sector remains heavily reliant on cash. That reliance isn’t by choice, but by necessity: federal prohibition continues to restrict access to basic financial infrastructure.
At the heart of the problem is cannabis’s status as a Schedule I substance under federal law. While 24 states have legalized adult‑use markets, cannabis remains federally illegal, exposing banks to massive risk under anti‑money laundering statutes and the Controlled Substances Act. Even with FinCEN guidance promising transparency in 2014, major financial institutions—like JPMorgan Chase, Bank of America, and Wells Fargo—continue to reject cannabis-related business accounts. The result? Cannabis roads are paved in green—of cash.
This cash dependence presents multi-tiered challenges. Operationally, companies must manage vast volumes of physical currency—requiring armored transport, cashiering, and accounting systems designed for cash-heavy businesses. In a stark example reported by the Southern California security expert Alex Saeedy, distributors have to physically haul hundreds of thousands in duffel bags just to cover payroll for employees the next day. Imagine: a logistics route without bank drops, governed by nighttime security, armored vehicles, and cash counts.
Security-wise, carrying heavy cash loads dramatically increases vulnerability. Clandestine operations attract theft, armed robbery, and extortion. Moreover, public safety becomes a concern as dispensaries and logistic hubs become cash-attractors.
From a business perspective, lack of access to financial services truncates growth. Only about 10 percent of U.S. banks or credit unions serve cannabis clients, and those typically impose hefty fees—0.5% on deposits plus expensive armored transport. This erodes margins in a sector already squeezed by steep taxation, compliance, and competition. Indeed, surveys show that over 70 percent of cannabis businesses identify “lack of access to banking or investment capital” as a top challenge.
Payment innovation has sprouted in response. The “cashless ATM” workaround once allowed debit-card-style transactions that settle as ATM withdrawals. Visa and Mastercard have since cracked down, stating these indirectly facilitate cannabis purchases and threatening enforcement. Alternative methods—ACH transfers, state‑licensed pre‑paid wallets, and stablecoin crypto payments—emerge, but face infrastructure, adoption, or volatility issues.
Legislative relief remains eagerly anticipated. The SAFER Banking Act, a bipartisan bill offering limited legal safe harbor to banks servicing cannabis businesses, has passed the House multiple times—but remains stalled in the Senate. At best, rescheduling cannabis to Schedule III may ease tax burdens, but—even with that—the banking thrombosis persists without more sweeping reforms.
In logistical terms, this creates daily friction. Distribution companies must staff cash‑processing teams, negotiate extra insurance, plan transport amid cash-heavy routes, and prepare for banking partners who may abruptly shut their accounts. Scaling operations across state lines—already complicated by state-by-state regulation—becomes nearly impossible when each locale demands bespoke payment solutions.
Until federal policy evolves, cannabis logistics will remain tethered to cash. Distributors face a high‑stakes balancing act: managing the operational burdens of a cash‑only system while exploring emerging payment alternatives—all under a legal cloud. Each load of cash that rolls through their hands is a stark reminder that, in an industry flush with growth, something as basic as a bank account remains out of reach.