The Rise of Cannabis Banking

Despite being legalized in most U.S. states and DC, marijuana (or cannabis, weed, pot, you name it) remains federally illegal. It is classified as a Schedule 1 controlled substance, on par with illegal drugs like heroin. The possession, distribution or sale marijuana is a crime at the federal level. This has prompted banks to shy away from working with state-licensed cannabis-related businesses (“CRBs”) because they risk being accused of money laundering or violating bank-secrecy laws, as well as facilitating the illegal drug trade. 

As more states began legalizing marijuana, in 2014, the Treasury Department clarified that banks can work with marijuana companies as long as they verify their state licenses and file suspicious activity reports for every transaction they make. Still, such onerous requirements have dissuaded many from getting involved. Big banks (e.g., JPMorgan Chase, Bank of America, and Wells Fargo) continue to say they don’t bank marijuana companies because it is against federal law.

But a few credit unions and smaller banks began offering services, willing to accept the additional costs of banking cannabis companies. Below are some examples of the cannabis business banking services they often provide:

• Cash management with pick-up and delivery services.
• Convenient remote check deposit.
• Digital banking and vendor payments.
• Domestic and international wire transfers.
• Direct deposit payroll and ACH transfer processing.
• Fraud prevention tools.
• Employee checking, savings, auto loans, and home lending.