top of page

Cannabis Banking: All About Banking for Cannabis Companies (With a List of Cannabis Banks to Try)

It’s no secret that cannabis banking can be convoluted. All businesses need a means of processing customer payments and storing that money. In any other industry, there are no issues involved in setting up a bank account and facilitating transactions.

But can marijuana dispensaries use banks? If not, how do dispensaries bank? Traditionally, cannabis businesses have been met with challenge after challenge in finding cannabis-friendly banks to work with. The good news, though, is the tide is turning.

We’ve put together this list of cannabis banks you can work with based on the state you do business in. We’ll also share tips on getting started with cannabis business banking so you can feel confident opening your account. 

Our cannabis payment processing solution here at Solvent streamlines your day-to-day operations and provides peace of mind knowing you’re staying compliant. Learn more today!

The Importance of Cannabis Banking

Reliable, efficient banking services are the backbone of any legitimate business. Cannabis companies are no exception. Despite the industry’s rapid growth, so many dispensaries and other key players struggle to access traditional financial services due to federal regulations.

As a result, many businesses try and operate on a cash-only model - which leads to a multitude of problems. Theft, fraud, and internal security issues can run rampant. Managing large lumps of cash can complicate payroll, vendor payments, and tax reporting as well.

But beyond the inefficiencies and worries of day-to-day operations, cannabis business banking plays a role in compliance. State regulations require strict financial oversight, including tracking transactions, monitoring suspicious activity, and maintaining transparent records.

Failing to set up cannabis business banking can expose you to fines, legal trouble, or worse - forfeiture of licenses you worked tirelessly and waited patiently to secure. 

In the grand scheme of things, cannabis-friendly banks are a key piece of the growth puzzle. They’re how you secure loans, manage credit, and build stronger relationships with vendors who prefer electronic payments.

You want to operate your business just like any other - professionally, securely, and with tools that help you thrive. Can marijuana dispensaries use banks though, or do they need to find some other solution for storing money and handling debit/credit card transactions?

Can Marijuana Dispensaries Use Banks, Though?

The short answer is yes, marijuana dispensaries can use banks - as can any other players in the cannabis industry from cultivars themselves to hydroponics suppliers that make it all happen. There’s a caveat, though: cannabis business banking has its limitations.

Federal law still classifies cannabis as a Schedule I substance, creating legal barriers for traditional banking. The 2018 Farm Bill was a step in the right direction but we still have a ways to go. There’s optimism around the SAFE Banking Act, though - more on that later on.

For now, just know there are a myriad of financial institutions offering services to cannabis businesses. They’re typically state-chartered banks and credit unions operating under strict compliance frameworks to manage the risks associated with serving the industry.

This is to say that not any bank will serve your business. It has nothing to do with their personal stance on cannabis, and everything to do with fear of violating federal regulations. The main concerns are the Bank Secrecy Act (BSA) and anti-money laundering (AML) rules. 

Cannabis-friendly banks have to file Suspicious Activity Reports (SARs) regularly, conduct stronger due diligence, and closely monitor all transactions to maintain compliance. In other words, banking for cannabis companies can be a headache for all parties involved.

This is why the list of cannabis banks you have to choose from is fairly short. It’s also why you should be prepared to pay higher fees and meet strict documentation/reporting requirements for cannabis banking. 

Cannabis Banking Recommendations: List of Cannabis Banks for Each State

We promised you a list of cannabis banks you can reach out to as a starting point, and we’ll break down these cannabis-friendly banks based on state. First, know that there are a few nationwide cannabis business banking options you have at your fingertips:

  • Dama Financial

  • First Citizens Bank

  • Green Check

  • Greenbax Marketplace

  • Regent Bank

  • Safe Harbor Financial

  • Salal Credit Union

But whether you’re looking for New Mexico banking or banking in Massachusetts, we’ve got you covered:

As the industry pushes forward you’ll have more and more cannabis business banking options to choose from, and as a result, more generous fee structures. For now, though, these are the top cannabis-friendly banks. So, how do dispensaries bank once they’ve chosen a provider?

How Do Dispensaries Bank? Tips for Opening a Cannabis Business Banking Account

Take your time weighing the options you have based on our list of cannabis banks above. Compare fees, customer service, and overall reputation before making your decision. 

From there, it’s just a matter of starting a conversation with someone at the financial institution you believe best suits your needs. Here are some tips on streamlining the cannabis banking process.

Be Upfront (But Cautious)

One of the worst things you can do when getting started with banking for cannabis companies is trying to hide the industry you work in. 

For one, it’s just not possible. You’re going to have to provide too much documentation to be sneaky. But more importantly, this just wastes time and continues to push the narrative that cannabis as an industry is something that should be hidden. 

Still, you need to set up a legit DBA (doing business as) name that doesn’t draw any unwanted attention your way. Try to avoid the common cannabis buzzwords dispensaries are known for using:

  • Bud

  • Green

  • High

  • Grass

  • Wellness

  • Extracts

  • Smoke

  • Joint

  • 420

  • MMJ

  • CBD

  • Cannabis

  • Dispensary

  • Provisioning 

  • Etc.

If you already have these in your name it’s not going to disqualify you from getting financial services, but you may run into more roadblocks than other businesses.

Prepare Required Documentation 

Any cannabis-friendly banks are going to want to know more about who you are and what you do. Have all necessary business information to meet regulatory obligations ready from the get-go to save time and stress:

  • Business licenses and state cannabis permits

  • Tax identification number (TIN)

  • Ownership structure and details of key stakeholders

  • Financial records, including revenue projections

  • Compliance protocols, such as seed-to-sale tracking systems

Demonstrate Compliance Readiness

Show the financial institution how eager you are to do things the right way by displaying all evidence of compliance with local and state cannabis regulations. 

Proof of internal compliance programs (like transaction monitoring and inventory controls) is typically required for securing cannabis banking services. 

Expect Enhanced Due Diligence

Don’t get frustrated if you can’t set up cannabis business banking in just a few clicks or even in the first conversation with a representative. Remember, cannabis-friendly banks have to conduct rigorous vetting.

This may include background checks on business owners, site inspections, and regular reporting requirements. The more transparent and cooperative you and your team are, the smoother and quicker the process will be.

Maintain an Ongoing Relationship

You don’t want to deal with getting assets frozen or losing payment processing capabilities, ending up back at square one.

So, continue to provide updated documents, stay ahead of compliance changes, and maintain open communication with your bank to avoid disruptions after your account is open. 

Can Dispensaries and Other Cannabis Businesses Get Loans Through a Bank?

We know you came here wondering, can marijuana dispensaries use banks? The answer is a resounding yes. But what about banking for cannabis companies that need a loan? The answer is fairly similar to banking in general - yes, but with a few caveats.

The legal gray area financial institutions have to navigate to offer loans to cannabis businesses deters many from doing so. However, there are plenty of banks that will support your business growth goals with financial assistance.

These lenders typically operate in states where cannabis is legal and have compliance programs designed to manage the unique risks of the industry. 

You may be able to get equipment financing, real estate loans, working capital lines of credit, and business expansion loans. Just prepare for some challenges and limitations:

  • Stringent Compliance Requirements: Lenders conduct more due diligence, including background checks, financial audits, and verification of compliance with state cannabis regulations. This is no different from cannabis banking in general.

  • Higher Interest Rates and Fees: Cannabis business loans often carry higher interest rates compared to traditional business loans due to the perceived risk of operating in this legal gray area.

  • Limited Loan Amounts: Some lenders may cap loan amounts or require significant collateral to offset risks. Again, this is because of the stigma associated with cannabis businesses.

If you’re unable to secure a traditional loan you have other options at your disposal. Private lenders, venture capital, and revenue-based financing are really common in this industry. But hopefully, the tide on banking for cannabis companies will continue to change for the better…

The Future of Cannabis Banking: The SAFE Banking Act

There are plenty of cannabis-friendly banks today, and we see a ton of potential for this industry to continue growing thanks to the SAFE Banking Act (Secure and Fair Enforcement Banking).

This legislation seeks to address one of the most prominent hurdles holding back the cannabis industry as a whole: limited access to traditional financial services due to federal restrictions.

The SAFE Banking Act would protect banks and credit unions from federal penalties when serving cannabis-related businesses operating legally under state laws. 

In turn, banks would have fewer risks deterring them from extending to cannabis companies the same services traditional businesses have access to. Theoretically, this would bring down fees for cannabis business banking and minimize the roadblocks to getting set up.

There are even societal benefits to the SAFE Banking Act, like lowered crime rates with fewer businesses relying on cash to keep their business running smoothly.

While banks would still need to follow strict compliance protocols related to AML and KYC regulations, passing this act would be a massive step in the right direction. It has bipartisan support in Congress but only time will tell when (and how) it will go through.

Wrapping Up Our Complete Guide to Cannabis Banking

That does it for our guide on banking for cannabis companies. While securing traditional financial services is certainly more complex for cannabis businesses, there are plenty of cannabis-friendly banks at your fingertips.

If you’re ready to take the next step towards simplifying cannabis banking, get started with the payment processing side of things at Solvent. We offer secure, compliant solutions to support your business. 

Contact us to today and learn how we can help you manage transactions with confidence! 

bottom of page