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“Today, we have a banking crisis because rules built decades ago have not kept up with changes in law and acceptable behavior. Working together, we can use common sense to bring safety and security to this legal industry and everyone who lives in Illinois.”

-Treasurer Michael Frerichs

Why we are involved

As the State’s Chief Investment Officer and Chief Banking Officer, the Treasurer’s Office is responsible for receiving the revenues and all other public monies of the state. However, banks and credit unions are often not willing to provide financial services to cannabis-related businesses because cannabis is still illegal under federal law. Due to the inconsistency between federal and state laws, banks and credit unions in Illinois are at risk of losing their assets, insurance, and licenses if they work with legitimate cannabis-related businesses authorized under Illinois state law.


This legal conflict has pushed Illinois’ legitimate cannabis industry primarily into a cash-based business. In 2018, there was an estimated $136 million in legal cannabis sales in Illinois alone. That much cash in any industry is ripe for theft, fraud, and tax evasion. By encouraging financial institutions to provide basic banking services to cannabis-related businesses, these businesses will be able to pay their taxes and fees transparently, comply with regulations, and thrive just like any other legal commercial enterprise.

Cannabis over stock ticker

As State Treasurer, our office is working with lawmakers at the state and federal level to bring clarity and predictability to our banking regulations, to protect and support financial institutions that provide services to cannabis-related businesses, and to design solutions that will boost economic development in the State of Illinois. To this end, the Treasurer’s Office has:


  1. Established banking services to collect taxes and fees from cannabis-related businesses on behalf of the state’s multiple agencies.
  2. Created the Community Invest – Cannabis Banking Services Program to support banks and credit unions in providing basic banking services to cannabis-related businesses.
  3. Introduced legislation to protect financial institutions in Illinois that provide services to cannabis-related businesses.
  4. Hosted Cannabis Banking Summits to bring industry players and experts together to help generate innovative solutions and form productive new partnerships.
  5. Contacted federal lawmakers to advocate for clarity and predictability in federal banking regulations.
  6. Co-authored a resolution before the National Association of State Treasurers to promote bipartisan solutions on the federal and state level.

How we collect fees, charges, and taxes on the state's behalf

The Treasurer’s Office is keenly aware of the necessity of working with financial institutions to collect fees, charges, and taxes effectively. Currently, we contract with three financial institutions to accept cash, checks, and electronic deposits from cannabis-related businesses on behalf of the state’s multiple agencies, which include the Illinois Department of Revenue, the Illinois Department of Financial and Professional Regulation, the Illinois Department of Agriculture, and Illinois Department of Public Health.


Community Invest – Cannabis Banking Services

The Community Invest – Cannabis Banking Services Program was created to support financial institutions in providing basic banking services to Cannabis-Related Businesses (CRB) in Illinois. As a result, CRBs will now have access to basic banking services starting on January 1, 2020.


Basic banking services include (1) the ability to write checks, (2) make direct deposits for payroll, and (3) make electronic or check payments of required licenses, fees, and taxes, among other services. The economic impact the Cannabis Banking Services Program provides is two-fold:  basic banking services give CRBs the capacity to grow while also promoting the transition from an all-cash cannabis market, estimated to be worth over $136 million in Illinois, to a fully banked, regulated, and transparent market.


Banking Options for Legal Cannabis-Related Businesses Act

In February 2019, the Treasurer’s Office introduced the Banking Options for Legal Cannabis-Related Businesses Act. This act provides protections within the Illinois state banking laws for financial institutions that provide services to cannabis-related businesses. As of July 2019, the Illinois Department of Financial and Professional Regulation (IDFPR) is prohibited from penalizing or discouraging a state bank or credit union solely for providing financial services to cannabis-related businesses.


Cannabis Banking Summits

After Illinois passed the Compassionate Use of Medical Cannabis Pilot Program, it was immediately clear that the incredible number of conflicting laws, rules and regulations needed to be addressed. As the cannabis landscape continued to change, both at the federal and state levels, the Treasurer’s Office brought together experts in cannabis banking, law, and regulation to ensure that financial institutions across Illinois had the most relevant information.


On April 2019, industry leaders from different states came together to offer presentations panel discussions on best practices and provided local financial institutions with a road map to banking cannabis-related businesses.


A subsequent summit is planned for December 2019.


Letters to President, U.S. Treasury, and U.S. Attorney General

As early as March 2017, the Treasurer’s Office anticipated the challenges Illinois and its burgeoning cannabis industry would face. To preempt these challenges, Treasurer Frerichs urged the President and federal policymakers to issue clear guidance of the enforcement of marijuana and banking laws. The letters outlined the necessity for federal policymakers to provide financial institutions with the assurance they will not face penalties or prosecution for conducting business with state-licensed cannabis businesses.


NAST Resolution on Cannabis

The Treasurer’s Office coordinated with other state treasurers through the National Association of State Treasurers (NAST) to promote a bipartisan cannabis banking resolution to alleviate cannabis banking related issues at the federal level. This resolution cements bipartisan support for common sense federal laws and regulations needed to provide essential banking services to legal cannabis businesses, promote financial transparency, and facilitate local, state and federal tax and fee collection without compromising federal enforcement of anti-money laundering laws against criminal enterprises.


Why this is Important

The inability of the legal cannabis industry in Illinois to use a bank or credit union for basic services defies common sense and must change. A legitimate industry that is estimated to be worth billions is being encouraged to hide in the shadows because of laws and banking rules built decades ago. As a result, the State of Illinois has been and will continue to be adversely affected.


We need to make it lawful for those in the legal cannabis industry to use banks and credit unions. We need to level the playing field so that banks and credit unions can play the simple yet vitally important role they are meant to play in keeping our communities safe and providing an avenue to boost economic development.


The longer we ignore the necessity to bank the more than $136 million in sales Illinois saw in 2018, the longer we needlessly invite risk to people and property as that $136 million is shuffled from place to place in duffel bags in the front seat of a car or stashed inside a trunk.


The longer we deny cannabis-related businesses basic banking services, such as electronic transactions, check writing, and access to capital, the longer we inhibit economic growth in our communities.