U.S. banks exist to provide financial services to the community they serve. Bank charters are granted and continuously monitored by regulators to ensure that banks fulfill the needs of their communities. Pennsylvania has legalized the production and sale of medical marijuana. In time they will generate revenue which will be used to pay employees, pay vendors and more importantly pay taxes. But who will process these transactions? What happens when an industry has a desperate need for financial services but the local bank shuts its doors to providing help, even though that industry is operating legally and in compliance with all state and local laws? This is the conundrum facing traditional depository institutions: serve the needs of the community or risk regulatory enforcement actions by banking regulators or worse, criminal indictments by federal law enforcement.

This article first outlines the legal and regulatory landscape facing financial intuitions who want to service the cannabis industry. The remainder of the article focuses on some very limited solutions that are being considered in an attempt to provide short-term figures to this critical problem.

Legal and Regulatory Landscape

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