Cannabis banking is a tricky subject shrouded in a lot of myths and misconceptions. This is unfortunate because, with the high volume of cash the average cannabis business can take in, having access to banking and understanding cannabis banking is vital. So, what does cannabis banking actually look like for a fully legal cannabis business? What is cannabis banking? Below is a look at how to handle banking in the cannabis industry, where to get an account, and how things could change shortly.
Cannabis Banking – A Closer Look
First off, let’s clear one major misconception: legal cannabis businesses can have bank accounts. You can open a business account that can be used to deposit funds and even pay employees or your business expenses—all this is vital to cash management in the cannabis business. The issue is not that cannabis banking is not possible, it is that only a select number of banks serve those in the cannabis industry.
Currently, major banking institutions do not serve customers in the cannabis industry. With cannabis federally illegal, it leaves the institution open to legal hardships if or when the federal government decides to step in. Therefore, the key is finding a credit union or community bank to serve you and your business despite the potential risk, and those entities definitely exist. Or, look for an institution that specifically caters to those in the cannabis industry looking for banking services.
Potential Change on the Horizon with the Cannabis Safe Banking Act
While most banks will not serve those in the cannabis business just yet, potential change is on the horizon. The Secure And Fair Enforcement Regulation Banking Act (SAFER Banking Act) just passed the Senate Banking Committee and is slated to potentially pass the Senate. The cannabis safe banking act would offer a sort of “safe harbor” for financial institutions that have previously not worked with cannabis industry clients for fear of federal penalties because cannabis is still illegal on a federal level. This would open up new doors for cannabis banking across a broader spectrum of financial institutions.
How to Navigate Creating a Cannabis Banking Account
The first step is to scout out banks that are willing to work with those in the cannabis industry. This can be a challenge, but the process can be simplified by working with a cash transport company like Plymouth Armor Group. Our experience serving the industry has allowed us to gather the names of banks that we gladly share with our clients. From here, other steps can include:
- Visiting a known cannabis-friendly bank to discuss your needs as a client
- Providing the details about your business with full disclosure that it involves cannabis
- Assessing the back based on what services they offer and their perceived customer service
- Examining the fees involved with different banks, such as account maintenance fees
Cannabis banking can be a bit more in-depth when it comes to the documentation you supply to the financial institution. For example, you may need to provide documents that show you are the owner, you are licensed, and are running a legal business.
Discuss Your Cash Transport Needs with an Established Name in Cannabis
PAG is one of the largest cannabis and cannabis cash transporters in New England. We have established working relationships with area financial institutions to simplify your search for the best cannabis banking. Reach out to discuss how we can help.