Cannabis Banking Rules (Federal Financial Compliance)

Cannabis banking is governed by federal rules that determine whether your account stays open, how you handle cash, and what your bank requires from you. Even though cannabis is legal in New York, it remains illegal at the federal level, which triggers enhanced banking oversight.

Banks must follow federal anti–money laundering rules when working with cannabis businesses. Your role is to keep records clean, consistent, and explainable.

What This Covers

How banks treat cannabis accounts
Required bank and federal reporting
Cash handling expectations
Documentation banks require
Payment method restrictions
Enforcement authority

Compliance Basics

Because cannabis is federally illegal, banks treat cannabis accounts as high-risk.

Expect strict onboarding, including:
- Ownership and control review
- License verification
- Site visits
- Ongoing transaction monitoring
Business records must be accurate, current, and accessible
Irregularities such as cash gaps, mismatched deposits, or undisclosed owners trigger reviews
Credit cards are not allowed
Only bank-approved payment methods may be used

Your objective is to avoid activity that gives the bank a reason to question your account.

Required Bank Reporting (SARs)

Banks must file Suspicious Activity Reports (SARs) for cannabis accounts.

Marijuana Limited SAR
- Filed when the business appears compliant
Marijuana Priority SAR
- Filed when potential violations are identified
Marijuana Termination SAR
- Filed when the bank closes the account

SARs are routine. Staying compliant keeps accounts in the Limited category.

Federal Reporting You Must Follow

Federal cash reporting rules apply directly to operators.

Form 8300

Must be filed if you receive more than $10,000 in cash from:
- A single transaction, or
- Related transactions
Filing deadline: within 15 days
Required information includes:
- Customer name and address
- Identification details
- Amount and date of payment
Structuring payments to avoid reporting is illegal

Currency Transaction Reports (CTR)

Filed by your bank if you deposit more than $10,000 in cash in one business day
Separate from Form 8300

Cash Handling

Banks closely monitor how cannabis businesses manage cash.

Count and log cash at opening and closing
Use dual-control safes
Use armored transport or consistent deposit schedules
Ensure deposits match POS and seed-to-sale data
Avoid structuring deposits
Keep cash levels reasonable and explainable

Cash activity that does not align with sales data is treated as a risk issue.

Documentation Requirements

Banks expect organized, up-to-date records, including:

NYS cannabis license and renewals
EIN and formation documents
Ownership and control records
Lease, insurance, permits, and utilities
POS reports and seed-to-sale data
Inventory and waste logs
Tax filings and payroll records
Cash logs, armored transport receipts, and deposit slips
Vendor and distributor contracts

Banks compare documentation to deposit and sales patterns. Gaps trigger compliance flags.

Payment Restrictions

Certain payment methods are prohibited.

You cannot use:
- Credit cards
- PayPal, Venmo, Cash App, Zelle
- Payment tools not approved by your bank
- Debit processed “as credit”
Credit cards are prohibited because major card networks follow federal law

Approved payment methods include:

Bank-approved PIN debit
ACH
Bank-approved online transfer tools
Cash
Compliant cashless ATM tools approved by the bank and OCM

Processors that disguise cannabis transactions delay detection but increase risk of frozen accounts.

Enforcement and Oversight

Identifies who enforces cannabis banking rules.

Financial Crimes Enforcement Network (FinCEN)
Internal Revenue Service (IRS)
Credit card networks (Visa, Mastercard, American Express, Discover)

What Operators Usually Miss

SARs are filed even when you are compliant
Form 8300 is the operator’s responsibility, not the bank’s
Structuring deposits is a federal crime
Using disguised credit processing increases enforcement risk

When This Comes Up

Opening or changing bank accounts
Adding owners or investors
Cash volume increases
Bank reviews or audits
License renewal reviews