As New Jersey remains mired in debate on the legalization of recreational marijuana, New Jersey banks and regulators should begin to consider how best to tackle the thorny issue of banking the marijuana industry. Although this issue is not entirely new to New Jersey (since medicinal marijuana has been legal in the state since 2012), the inevitable onslaught of marijuana-related businesses (MRBs) if and when recreational use is legalized may cause this issue to be one of the most difficult to reconcile in the years following legalization.

The issue is both simple and complex. Marijuana remains a Schedule I substance under the Controlled Substances Act (CSA), sharing that designation with such drugs as heroin, LSD and MDMA. See 21 U.S.C. 812(b)(1). The designation signifies that the substance has a high potential for abuse and no accepted medical use. However, despite being illegal for all purposes under federal law, as of May 31, 2019, medicinal use of marijuana is legal in 33 states and recreational use is legal in 10 states (with Illinois poised to become the 11th state). An estimated 95% of the U.S. population lives in a state where cannabis (including CBD) is legal in some form.