Even though cannabis banking provisions are being introduced in Congress, unless and until the Safe Banking Act passes, federal approval of banking still feels a long way off. As the American Banking Association says, “Currently, thirty-seven states, the District of Columbia, Guam and Puerto Rico have all legalized the use of marijuana to some degree. Yet the possession, distribution or sale of marijuana remains illegal under federal law, which means any contact with money that can be traced back to state marijuana operations could be considered money laundering and expose a bank to significant legal, operational and regulatory risk.”
However, as of early 2021, the Financial Crimes Enforcement Network reported that 515 banks and 169 credit unions provided banking services to marijuana-related businesses (MRBs). Unfortunately, not many banks openly advertise themselves as a cannabis-friendly bank or their willingness to work with a Marijuana Related Business (MRB).
So what’s a cannabis business to do? Here are some options:
Find a community bank or credit union that is only chartered in your state to do business with, since they have fewer federal regulations.. Several states have financial institutions that work with cannabis companies, however, they generally have internal policies limiting how many high-risk customers they’re willing to take on. Each financial institution ultimately decides whether to provide banking services to a cannabis-related business, including hemp, marijuana or other cannabis derivatives. Since many banks don’t advertise that they have cannabis businesses as clients, it never hurts to ask. Inquire about the bank’s compliance standards, requirements and reporting procedures. And be ready to do your due diligence by producing all the necessary documents.
Work with a service that works with credit unions. There are some options that have relationships with credit unions that provide state-legal cannabis businesses with compliant bank accounts, lending, payments, and other financial services.
Find a service that provides tailored payment processing solutions to cannabis dispensaries. An example of this is Paybotic for Nevada cannabis dispensaries or Left Coast Financial Services for Oregon cannabis dispensaries.
