Editor's note: This article has been reviewed and updated for accuracy in 2026. Although cannabis is technically legal in 33 states, it's still a schedule 1 substance under federal law. Plus, most financial institutions fear working with the cannabis industry because of possible federal prosecution, even though the substance is mostly legal at the state level. So, unfortunately, both in America and around the world there's still a heavy negative connotation with the substance, which significantly affects the cannabis industry. Every company deals with financial hurdles now and then, but there are solutions to anticipating them and navigating them. Plus, with legislators and other activists working on getting better solutions for cannabis companies, we can hope that the industry will improve in time. Needs for Financing in the Cannabis Industry Banks provide many perks besides being a safe place for storing money. They provide financial stability and without that it can be hard to keep cashflows running, expand operations, and even pay vendors and suppliers. Banks offer lending opportunities so businesses can grow, plus the usual credit and checking accounts that operate electronically. Business often have quite significant unforeseen expenses that without a banking partner, can kill a small business. TL;D