With the recreational use of marijuana now legal in nine U.S. states and Washington, D.C., the market for legal cannabis is ablaze, but legal experts say the unwillingness of banks to serve the sector is restricting the opportunity for payments firms.
Taking in more than $9bn in 2017 and projected to grow past $20bn by 2020, the legal cannabis industry would seem to be fertile ground for non-bank financial firms and money services businesses (MSBs).
Although a crop of legal marijuana-focused MSBs and other payment service providers has emerged, most are based on alternative models such as prepaid cards and cryptocurrency. For mainstream financial services, banks remain the crucial missing link in the chain.
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