skip to Main Content
How to Open a Marijuana Bank Account

According to the Associated Press (AP), more than 300 banks and credit unions (institutions) in the United States now handle marijuana money. This is almost a 500% increase from early 2014. There are more than 25 states with some form of a legal marijuana market, and more marijuana-related bank accounts are opening every day. Companies are often at a loss when it comes to figuring out how to open a marijuana bank account.

Regulatory Compliance

An operational marijuana license is the privilege to sell, cultivate, or manufacture marijuana or marijuana-related products. On top of the financial requirements related to AML, BSA, Cole Memo, FinCEN and more, marijuana businesses must also comply with the Federal, State, County, and City regulatory levels.

Even though marijuana businesses are not supported or recognized federally, each one must adhere to all federal requirements and related regulatory agencies; including the IRS, OSHA, EPA, Agriculture, Labor and others. Each state, city and county where marijuana sales are legal generate regulatory code and statutes to govern and tax production and sales. Some states have implemented more than 400 pages of regulatory code governing legal marijuana operations.

5 Steps to a Marijuana Bank Account

  1. Application Processing, Screening & Acceptance
  2. Account Setup & Reporting
  3. Routine Compliance Monitoring
  4. Secure Cash Management & Deposit Verification
  5. On-going Due Diligence & Compliance Training

Application Process, Screening & Acceptance

Screening a marijuana business for an operational marijuana bank account can be a daunting task. One bank in Colorado has a checklist requiring more than 40 documents prior to processing an application for a business account that sells, processes or cultivates marijuana as its primary business. Along with standard legal agreements, account information and required financial information, banks and credit unions can also require the following:

  • Ownership and Owner Details
  • Operational Details
  • State Documentation
  • City and/or County Documentation (Dual-Licensing)
  • Regulatory Compliance Documentation
  • Validation or Deposit Information

Account Setup and Reporting

To facilitate reporting requirements, design a marijuana account compliance risk management framework and develop written compliance program documents consistent with the institution’s objectives and regulatory requirements. Considerations should include the Banking Secrecy Act, FinCEN, Cole Memo, Anti-Money Laundering, Know Your Customer requirements and more. Focus on scalable, effective, and low-cost processes to support readiness reviews, risk and control assessments, remediation and transaction testing. Effective on-boarding and account setup is imperative for institutions to support monitoring and reporting requirements. Preparing for continual regulatory inspections should be a component of any successful program.

Routine Compliance Monitoring

Routine compliance monitoring involves assessing and evaluating a standard or common set of rules and requirements by operational license locations in an automated, repeated fashion. Effective compliance monitoring includes establishing a baseline or scoring mechanism to track and report on overall progress. The leading marijuana compliance software in the market, Adherence SCORE App, lists more than 330 operational requirements (federal, state, city and county) in its compliance assessment for a retail (21+) infused producer license located in Denver, Colorado.

An infused producer is a licensed manufacturer of ingestible or topical marijuana products. The average compliance score for the retail marijuana infused producer license type in Colorado is 78.4% in 2016, based on more than 10 assessments conducted. On average, these licenses fail more than 16 federal, state, and/or local compliance requirements.

Secure Cash Management & Deposit Verification

Currently, the top credit card vendors in the U.S. will not allow PIN-debit or credit card transactions by a merchant that is identified as a legal marijuana business. For institutions considering setting up a program, account holders must process cash for all marijuana product sales. The handling of currency creates the need for a secure cash management supply chain, including money processing, transport and verification reporting. Effective cash management starts with well documented plans (e.g. Standard Operating Procedures covering federal, state, city and county requirements) and aligning with a secure, insured vendor for processing solutions, deposits and cash vaulting needs.

On-Going Due Diligence and Compliance Training

As banks are unable to absolve their operational risk with marijuana businesses, staying ahead of the compliance curve will be instrumental in managing an effective marijuana banking program. Enhanced due diligence will be of utmost importance.

A marijuana banking program can be expected to be routinely reviewed by and commented on by regulatory authorities. On-going due diligence requires continual program evaluation internally to ensure teams are ready for regulators.

Continuing Education

Given the four levels of regulatory oversight (federal, state, city and county), continuing education and compliance training is critical to a program’s success. As this is an emerging and growing market, compliance will continue to be a core competency for successful marijuana businesses and banking programs. With new and ever changing regulations, continual review of regulatory rules and requirements will be necessary to ensure account holders are compliant across multiple categories—NOT just inventory.

Marijuana Banking Software?

Do banks need to buy expensive marijuana monitoring software that requires costly implementation and management licensing fees? It may be better to spend that time and effort on ensuring the up-front vetting or a proper account verification process is in place, as well as a clear understanding of how the business processes and accounts for inventory.

Many marijuana businesses are faced with reconciling multiple, disparate inventory systems. e.g.

  • Physical or on-hand inventory
  • Point-of-Sale inventory (e.g. BioTrackTHC)
  • State-mandated inventory tracking system (e.g. BioTrackTHC)
  • Accounting system (Quickbooks)

Does “out-of-the-box” marijuana banking software ensure that up to four disparate systems are accurately reconciled? A physical inventory inspection along with comparative analysis of inventory system reconciliation should occur first. Has this particular marijuana business always been compliant with inventory?

Garbage In, Garbage Out

Most banks already have suitable AML/BSA systems in place for monitoring and alarming on various limits or thresholds on active account holders. For marijuana banking accounts, a similar ‘in-house’ method should be implemented or in place for constraints related to the FinCEN and Cole Memo requirements.


With California’s upcoming conversion of medical marijuana to a “for-profit” model, as well as the pending retail marijuana (AMUA) vote in November, it’s only a matter of time until State Assemblies start proactively addressing the banking and all-cash situation with marijuana. Insiders in the marijuana industry are hoping the election in the fall of 2016 will change the federal course and lead to rescheduling marijuana. Until the federal government acts, hopes for continued marijuana banking will remain at the local or state level.

Want to learn more? Request and download the white paper, “How to Bank a Marijuana Account – A Compliance Guide for Financial Institutions.”

Steve OwensSteve Owens

Steve Owens

About the Author:
Steve Owens, MBA, is the CEO and Founder of Adherence Compliance and is considered a thought leader in regulatory and financial marijuana compliance. He has written extensively in the areas of operational compliance and has more than four (4) years of marijuana regulatory and financial compliance expertise. Contact 720-616-3900 or visit for more information.

This Post Has One Comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Recent Stories

Recreational marijuana is now legal in Missouri, but medical users still have advantages

Missourians can possess cannabis after a law legalizing recreational marijuana took effect this week. But even though adults can legally use marijuana, dispensary operators say some marijuana users may choose…

Awash in illegal marijuana, Oregon looks at toughening laws

In 2014, Oregon voters approved a ballot measure legalizing recreational marijuana after being told it would eliminate problems caused by “uncontrolled manufacture” of the drug. Illegal production of marijuana has instead exploded.…

Marijuana industry sales slow down after pandemic surge

After enjoying a sales surge during the pandemic, the U.S. cannabis industry is showing signs of a slowdown as it faces economic and regulatory challenges and people choose to spend…

Minnesota Company behind “Death by Gummy Bears” marijuana edibles accused of selling products 50 times more powerful than allowed

The Minnesota pharmaceutical board filed a civil lawsuit this week alleging that a cannabis retailer sold edible products containing more than 50 times the state’s legal limit for THC. The…

More Categories

Back To Top
×Close search