How to Find Cannabis Friendly Banking the Easy Way

The days of hunting high and low for a cannabis-friendly bank are finally over — if you know where to look. Even with the U.S. Drug Enforcement Agency (DEA)’s plans to reschedule cannabis as a Schedule III substance — a move that could theoretically improve banking access — any practical effect of this change will take quite some time, and businesses need banking now.

The good news: there are plenty of financial institutions that want to work with legal cannabis businesses, even if it may sometimes feel like they’re not easy to find. This guide will help you find these cannabis-friendly banks the easy way, without doing tons of research or wondering whether they’ll support your business for the long haul.

1. Get your documents and data in order

No matter which financial institution you choose to work with, you’re going to need to provide documentation about your business as part of the application process. Some of the information you may be asked to provide includes:

• Articles of incorporation
• Taxpayer ID number
• Photo ID
• Proof of address
• Certificate of good standing
• Proof of insurance
• Your license and a copy of your application, if you’re a plant-touching business

Some of this documentation is required to open an account, no matter what kind of business you run. The extra information is requested so banks can support their anti-money laundering (AML) efforts through a process known as Know Your Customer (KYC).

Getting all the necessary documents in order before applying for a bank account can make your life easier. It can also help banks quickly process your application and get your account up and running sooner. For a checklist of everything you need, read our guide on cannabis banking documents you should organize when applying for a bank account.

2. Identify reputable, cannabis-friendly banks

A longstanding challenge in the cannabis industry is finding banks that are enthusiastic about working with the industry. In many cases, cannabis businesses could secure a bank account only to see it suddenly closed without warning. This led to many cannabis businesses hiding the true nature of their business from financial institutions, eroding trust between banks and cannabis businesses and, ultimately, ending in failed relationships. 

As the cannabis industry has grown, so too has the number of banks willing to work with cannabis operators. Although more financial institutions are banking cannabis businesses than ever before, it can still be a challenge to find these cannabis-friendly banks, as not every bank is willing to advertise their services to the cannabis industry. 

That’s where the Green Check Connect marketplace comes in. In our marketplace, verified cannabis businesses connect with financial institutions that are actively looking to serve the industry, so you can rest easy knowing all the financial institutions you connect with are cannabis-friendly and well-versed in the industry’s needs.

3. Start your application

When applying for your account, it’s critical to be transparent with the bank about your business operations. If you’re a plant-touching business like a cultivator, manufacturer, or dispensary, be clear about those aspects of your business. If you’re an ancillary business, disclose that you work with plant-touching entities. If you’ve selected a cannabis-friendly bank through Green Check Connect, you won’t have to worry about rejection due to the fact that you work in the cannabis industry.

Once you’ve supplied all necessary documentation and answered the financial institution’s questions, they should be able to process your application quickly. This is especially true for banks that already have a cannabis banking program up and running. Experienced banks can efficiently process your application so you can get back to running your business.

4. Have a backup plan

When you secure banking from a cannabis-friendly financial institution, you’re likely in good shape. However, given the dynamic nature of the industry, it doesn’t hurt to have an alternative lined up. Anything can happen in the cannabis industry; your bank could stop working with cannabis companies somewhere down the line. Those interruptions to your finances are painful, and the best way forward is to be prepared.

As one way of staying prepared, it’s not uncommon for a cannabis business to have multiple bank accounts with different banks. That way, if one is shut down, there’s another account that you can seamlessly transition to.

There are also similar alternatives that can help keep operations running if something goes wrong. One easy way to ensure you can continue sending and receiving payments is through Green Check Direct. Even if you lose your bank account, Green Check Direct supports bill payments, wire transfers, and instant ACH transactions, so you can keep your business up and running until you find a new bank to work with.

Cannabis banking trends to watch and how they affect access to financial services

There are plenty of positive signals that suggest the future of cannabis banking is even brighter than it is today. While a lot of progress has already been made and banking is more accessible than it once was, these trends could further open up the banking system to legal cannabis businesses.

• Federal cannabis policy reform: A shift in federal law could help reduce the hesitation of many financial institutions to extend services to the legal cannabis industry. Signals that cannabis will be rescheduled on a federal level will certainly have an impact as it unfolds. Other measures such as the adoption of the Secure and Fair Enforcement Regulation (SAFER) Banking Act could go a long way toward lowering barriers to entry for these more cautious institutions.
  

• Cannabis education in finance: Part of the reason banks have been slow to pivot into the cannabis industry has been a lack of knowledge and education about the space. As cannabis becomes more a part of daily life for millions of Americans, that normalization is spreading to financial institutions. At Green Check, part of our mission is to help facilitate that education, and as more financial professionals learn about the industry and how to serve it, financial institutions become more likely to get involved.
  
• Growth of certified cannabis banking professionals: As the industry matures, the emergence of cannabis banking certification programs offers a way for more banking experts to get involved in the industry with confidence. As more people obtain these accreditations, more banks may feel comfortable launching cannabis programs of their own, which could further expand access for cannabis businesses.

Cannabis banking made easy

At Green Check, our goal is to make cannabis banking easy, both for cannabis operators and financial institutions. Through services like Green Check Direct and Green Check Connect, we’re helping bridge the gap between the legal cannabis and finance industries to help build a thriving and profitable community. So, if you’re in need of banking or other financial services for your cannabis business, get started by plugging into our vast network of cannabis-friendly financial institutions.