Michigan lawmakers discuss cannabis industry's banking challenges amid federal illegality

The Michigan House of Representatives held a meeting on May 15, 2025, focusing on the challenges faced by the cannabis industry, particularly regarding financial services and regulatory issues. Key discussions highlighted the ongoing difficulties that licensed cannabis businesses encounter due to the federal illegality of cannabis, which complicates their access to banking and insurance.

During the meeting, representatives expressed concern that the current taxation levels on cannabis businesses could jeopardize the industry's viability. One speaker emphasized that many operators are already financially strained and cannot withstand further tax burdens. The discussion underscored the need for a supportive regulatory environment to ensure the industry's survival and growth.

A significant point raised was the limited access to financial institutions willing to work with cannabis businesses. Many owners reported that they can only use specific banks, which often impose high fees and stringent requirements. The complexities of banking cannabis money, including extensive paperwork and regulatory audits, make it challenging for these businesses to operate efficiently. One attorney noted that even personal banking options for cannabis business owners are severely restricted, with many lacking basic protections like bankruptcy options.

The meeting also touched on the broader implications of federal cannabis policy. While Michigan has legalized cannabis, the lack of federal recognition continues to hinder the industry's growth. Discussions included the potential for rescheduling cannabis at the federal level, which could alleviate some of the regulatory burdens and open up more banking options. However, delays in federal hearings and ongoing litigation have left many in the industry uncertain about the future.

In conclusion, the meeting highlighted the urgent need for legislative action to address the financial and regulatory challenges facing Michigan's cannabis industry. Without significant changes, stakeholders warn that the industry's health and sustainability could be at risk.