The U.S. cannabis industry is set for significant expansion over the next decade, with a projected need for **$130.7 billion** in funding, according to a new report by Whitney Economics, CTrust, and Green Check.
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The cannabis sector, currently generating **$28.8 billion** in retail sales, could see that figure balloon to **$87 billion** by 2035, as the industry adds **25,000 to 30,000 new business licenses** to the existing 40,000. Major financial opportunities are expected in states like California, Florida, Illinois, New York, Pennsylvania, and Texas.
This expansion represents a substantial opportunity for financial institutions, with the potential lending opportunity ranging from **$65.6 billion to $130.7 billion** over the next decade. The report suggests that this could generate **$1 billion to $2.4 billion** annually in interest revenue for lenders. However, the full potential remains untapped, as banks are still cautious about entering the market due to regulatory uncertainties and financial risks.
**Beau Whitney**, the founder of Whitney Economics, emphasized that while there are significant opportunities in the cannabis sector, these come with inherent risks, though many of these risks can be mitigated with industry expertise. The growth needed to sustain the cannabis industry can no longer rely on informal funding sources such as friends and family, highlighting the importance of institutional involvement.
The potential impact of the **SAFER Banking Act** offers some hope for mitigating these risks. The Congressional Budget Office (CBO) recently projected that if enacted, this bill would boost federally insured deposits from cannabis businesses by billions, with banks seeing an increase of **$1.5 billion** by 2026 and **$2.9 billion** by 2034. The SAFER Banking Act would also extend protections to federal mortgage programs, treating income from state-legal cannabis businesses like other legal sources of income. This could lead to more VA loan guarantees and an increase in loan volume by **$450 million per year**.
Despite these promising projections, the CBO noted "significant uncertainty" surrounding federal agencies' future guidance, and how financial institutions might respond, leaving some ambiguity about the law’s full economic impact.
In the meantime, individual states are beginning to take their own steps to support cannabis-related businesses. Delaware recently passed a bill protecting financial institutions from state-level prosecution if they work with cannabis businesses, with other states considering similar measures. However, until there is more federal-level support and banking reform, the ability to create a sustainable source of capital for cannabis operators will remain a challenge.
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