To ensure that we captured the effect of legalization on deposits and loans and not other possible factors, we adjusted our data to account for other differences among banks and states that may have influenced these trends.
We found that bank deposits grew, on average, an additional 4.3% in those four states after they legalized marijuana relative to states that had not yet done so. The volume of loans surged 6.5% more in states where marijuana was legal.
These findings suggest banks were either unconcerned about the potential risk associated with accepting cannabis-related deposits or optimistic about the chances that regulations will adapt to the needs of legalizing states. These findings are significant because every dollar of new deposits increases the lending supply, which can help economywide financing, growing more than just cannabis businesses.
Why it matters
States began legalizing recreational pot in 2012. And in 18 states it is now fully legal.
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