What is cannabis banking compliance?
Cannabis banking compliance refers to the set of legal, regulatory, and operational measures that financial institutions must implement to provide services to cannabis-related businesses (CRBs) in a compliant and safe manner.
Although cannabis remains federally illegal, institutions can serve this industry by adhering to specific federal guidance and FinCEN’s 2014 memo and maintaining robust compliance programs that meet Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) requirements.
At Cogent Law, we recognize that cannabis businesses face unique legal challenges, particularly around accessing and managing financial services. Our cannabis banking lawyers guide financial institutions and cannabis businesses through this complex and evolving legal landscape, ensuring compliance and minimizing legal risks.
Our cannabis banking attorneys have years of expertise creating and launching cannabis banking programs. Several of our attorneys were formerly in-house general counsel and chief compliance officers at financial institutions that successfully launched cannabis banking programs, including lending services. Our team is fully equipped to address all your needs related to creating and launching a cannabis banking program at your bank or credit union.
Who Needs Cannabis Banking Compliance Services?
- Community Banks and Credit Unions—typically with $300M to $25B in assets, looking to expand their client base by serving the underserved cannabis industry while mitigating risk.
- Cannabis-Related Businesses—seeking access to reliable financial services, managing financial transactions, and ensuring compliance with all relevant federal, state, and municipal guidance and regulations.
Both financial institutions and cannabis businesses can benefit greatly from working with a qualified cannabis banking attorney to help manage risks, maintain compliance, and secure access to essential banking services.
How Cogent Law Can Help
Cogent Law provides comprehensive legal guidance and strategic support to institutions and businesses navigating the cannabis banking sector.
Our services include:
✔ Developing cannabis-specific policies and procedures aligned with regulatory expectations
✔ Conducting comprehensive risk assessments and identifying compliance gaps
✔ Training leadership, compliance staff, and operations teams on CRB-specific risks and obligations
✔ Assisting with preparation for regulatory exams and audits
✔ Advising on fee structures and profitability strategies
✔ Offering ongoing counsel to address evolving legal and regulatory developments
Our cannabis attorneys are supported by a cross-disciplinary team with expertise in corporate, criminal, securities, private equity, mergers and acquisitions, intellectual property, litigation, regulatory, and government investigations.
With extensive experience at the federal, state, and municipal levels, we offer practical, strategic, and cost-effective counsel to help you confidently navigate cannabis banking compliance.
In particular, our
cannabis banking attorneys can assist with the
creation and implementation of your
CRB program, including but not limited to:
✔ Board/Senior Management Presentations
✔ External Legal Opinions
✔ Interpreting 2014 FinCEN Guidance
✔ CRB Policies and Procedures
✔ CRB Onboarding
✔ CRB SAR Reporting Requirements
✔ CRB Due Diligence
✔ BSA Staff Training
✔ CRB Deposit and Loan Agreements
✔ Examiners’ Expectations
✔ CRB Strategic Planning & How to Calculate Return on Investment/Fees
✔ CRB Risk Assessments
✔ Examination Support
Benefits of Hiring an Attorney for Cannabis Banking Compliance
Hiring a cannabis banking attorney provides essential advantages:
- Protect Your Business from Financial Risk—Legal counsel helps manage financial transactions, reducing exposure to legal and regulatory penalties.
- Ensure Compliance—Stay current with fast-changing cannabis regulations and ensure your institution or business operates within all legal boundaries.
- Access Essential Banking Services—A cannabis banking attorney facilitates relationships with financial institutions familiar with cannabis industry complexities, making financial transactions more secure and streamlined.
- Operational Efficiency—Implement customized policies and training to ensure seamless integration of cannabis banking services.
- Profitability and Market Leadership—Leverage strategic legal guidance to develop profitable fee structures and position your institution as a market leader before broader federal legalization.
What to Expect When Working With Us
1. Initial Consultation
We assess your institution’s or business’s goals, risk tolerance, and current compliance posture to determine feasibility and outline strategic next steps.
2. Customized Roadmap
We provide a detailed, tailored plan for building or enhancing your cannabis banking program, based on your market, risk appetite, and objectives.
3. Policy and Procedure Development
Our team drafts cannabis-specific onboarding protocols, due diligence frameworks, risk-based monitoring systems, and reporting mechanisms
4.
Training and Education
We offer targeted training to ensure leadership and compliance teams understand all cannabis-related regulatory requirements and risks.
5. Ongoing Compliance and Risk Management
We support regular risk assessments, transaction monitoring, and preparation for regulatory exams, ensuring continued compliance and readiness.
6. Profitability Optimization
We advise on structuring fees and services to create a sustainable and profitable cannabis banking program.
Is your financial institution offering, or considering offering, financial services to cannabis-related businesses (CRBs)?
Here’s a free guide & checklist developed by Chris to assist your financial institution so that it appropriately manages the risks and meets the regulatory expectations of having a CRB program. Click here to download the checklist.
Cannabis Banking Compliance
Frequently Asked Questions (FAQ)
1. How do we know if our financial institution is ready to offer cannabis banking services?
Determining readiness involves evaluating your institution’s risk appetite, compliance infrastructure, and operational capacity. A comprehensive risk assessment should identify any policy gaps, resource limitations, or areas requiring additional staff training before launching a cannabis banking program.
2. What protections are available to financial institutions that serve cannabis-related businesses?
While cannabis remains federally illegal, financial institutions that follow FinCEN’s 2014 guidance and BSA/AML protocols with robust compliance frameworks will not compromise their CAMELS ratings. Consistent adherence to these measures has kept financial institutions serving CRBs safe from federal enforcement actions to date.
3. Do we need to notify regulators or obtain special licenses before serving cannabis businesses?
No specific federal license exists for cannabis banking, nor are our institutions required to notify their regulators about their cannabis banking programs. However, regulators expect full transparency. Many institutions notify their prudential regulators, and all should maintain detailed documentation demonstrating adherence to applicable guidance and risk-based compliance policies. Consulting with legal counsel is essential to ensure alignment with regulatory expectations.
4. What are the examiner expectations for cannabis banking programs?
Regulators expect your institution to:
✔ Demonstrate a thorough understanding of the risks associated with serving CRBs.
✔ Implement robust policies and procedures tailored to cannabis banking.
✔ Conduct enhanced due diligence and ongoing monitoring of CRB accounts.
✔ File appropriate Suspicious Activity Reports (SARs) and Currency Transaction Reports (CTRs).
Our attorneys at Cogent Law can assist with ensuring your program is examiner-ready, providing guidance based on direct experience with regulatory examinations.
5. What policies and procedures are essential before onboarding CRBs?
Key elements include:
✔ Comprehensive CRB onboarding policies outlining due diligence requirements.
✔ Procedures for ongoing transaction monitoring and SAR reporting.
✔ Risk assessment methodologies specific to cannabis clients.
✔ Clear guidelines for account closures and risk mitigation.
We help institutions draft these documents to align with both FinCEN expectations and internal operational workflows.
6. How should we structure fees to cover the costs of cannabis banking compliance?
Serving CRBs involves elevated compliance costs and risks due to increased due diligence, reporting, and monitoring obligations. Many institutions adopt fee-based models, including account maintenance fees, transaction fees, and loan origination fees. We work with clients to develop pricing structures that reflect compliance costs and risks while supporting program profitability.
7. Can our institution offer lending services to cannabis-related businesses?
Yes, but lending to CRBs introduces additional legal, credit, and compliance risks. Proper structuring of loan agreements, risk assessments, and regulatory documentation is essential. Cogent Law has significant experience assisting institutions with developing cannabis lending programs and crafting appropriate CRB loan agreements.
8. What legal risks do we face when serving cannabis-related businesses?
The primary risks include:
✔ Federal enforcement actions, though mitigated by compliance with FinCEN guidance.
✔ Reputational risk among customers and other stakeholders.
✔ Operational risks due to increased compliance demands.
✔ Regulatory scrutiny from state and federal banking examiners.
Legal counsel plays a vital role in minimizing these risks through proper program design and ongoing compliance support.
9. How do we handle situations where state and federal laws conflict?
Navigating the conflict between state-legal cannabis businesses and federal prohibition is a core challenge. Institutions must adopt a risk-based approach, recognizing that state legality does not remove federal risk. Our team provides external legal opinions to support decision-making and mitigate potential liability.
10. What support can Cogent Law provide during regulatory examinations?
We offer full examination support, including:
✔ Preparing documentation that demonstrates compliance with FinCEN and BSA/AML requirements.
✔ Coaching for staff and leadership on responding to examiner inquiries.
✔ Assisting with post-examination remediation efforts, if needed.
Our attorneys have successfully supported institutions through cannabis banking examinations and are prepared to help your institution navigate this critical process.
11. How do we calculate the return on investment (ROI) for a cannabis banking program?
ROI involves evaluating potential revenue streams (fees, deposits, lending) against the cost of implementing and maintaining the compliance program, also taking into account the additional risks. Our team offers strategic planning services to help institutions develop sound business models, calculate ROI, and establish appropriate pricing structures.
12. What training will our staff need to support a cannabis banking program?
Staff should receive training on:
✔ CRB onboarding and due diligence protocols.
✔ BSA/AML requirements specific to cannabis banking.
✔ SAR reporting procedures for cannabis-related transactions.
✔ Examiner expectations and compliance documentation.
Cogent Law offers BSA Staff Training tailored to the cannabis banking context, ensuring your team is equipped to manage program requirements confidently.
FAQ From a Trusted Cannabis Banking Attorney
What Is Cannabis Banking?
Cannabis banking refers to how cannabis businesses access financial services like checking accounts, lending, and credit processing. Since cannabis remains federally illegal, many banks hesitate to serve this industry. As a cannabis banking attorney, we guide clients through the legal landscape, helping them establish compliant financial relationships, minimize risk, and maintain transparency. Our services ensure your business operates within both state and federal regulatory frameworks.
How Can a Cannabis Banking Attorney Help My Business?
A cannabis banking lawyer helps your business build safe, lawful access to financial services. We provide legal guidance on regulatory compliance, draft financial agreements, and assist in communication with banks and credit unions. Our team ensures your cannabis business meets federal and state laws, reducing the risk of fines, account closures, or criminal penalties. With our help, you can focus on growth while we manage the legal complexities of cannabis banking.
What Should Financial Institutions Consider Before Working With a Cannabis Banking Attorney?
Financial institutions must evaluate compliance requirements, risk exposure, and due diligence before engaging with cannabis businesses. Working with a cannabis banking attorney allows banks to design policies that meet FinCEN and BSA/AML standards. We help institutions implement monitoring systems, customer vetting procedures, and legal documentation tailored to the cannabis sector. Our guidance reduces liability and empowers financial institutions to serve this emerging market safely and legally.
Can Cannabis Businesses Legally Get Bank Accounts?
Yes, cannabis businesses can legally open bank accounts, but only under strict regulatory conditions. As cannabis banking lawyers, we help clients identify cooperative financial institutions, gather the necessary compliance documents, and maintain good standing. Our goal is to ensure long-term, uninterrupted access to banking services. With the right legal framework in place, cannabis businesses can operate securely and transparently, even within a complex legal environment.