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Opening a bank account is one of the most important things when opening a cannabis dispensary. It’s also one of the most complicated and confusing tasks for anyone starting a business. You need to know several things before opening a bank account for a cannabis dispensary, no matter how large or small your company is.
You need to make sure your bank is open to accept your account.
You may be surprised to learn that, unlike most other businesses, cannabis dispensaries are not required to use banks. Banks can choose whether or not they want to accept accounts from cannabis businesses at their discretion.
There are some federal regulations that banks must follow when accepting bank account for a cannabis dispensary:
- The bank must file paperwork with the Financial Crimes Enforcement Network (FinCEN) at least 45 days before opening the account;
- The bank must verify your business’s tax ID number and file a suspicious activity report if you make a transaction over $10,000 in cash; and
- The bank must report any suspicious activity regarding your account within ten days of its discovery
Your bank will have to file special paperwork to accept your account.
You may have heard about this before, but a bank must file special paperwork with the federal, state, and local governments to accept your account. It’s also important that you get your business set up properly before opening an account so that it is fully compliant with tax regulations and other legal requirements. Because cannabis dispensaries are not allowed to use traditional banks because of federal laws against marijuana, it can be difficult for any new cannabis dispensary owner to find a bank willing to take their money.
Provide proof that you are certified as an agent for the marijuana business.
You need to prove that you are certified as an agent for the marijuana business. This is done by providing copies of your state-issued business license and certificate of registration and a copy of your business tax certificate with the state.
Banks are concerned about the risk of fraud and money laundering. Banks want to know if your company will be processing debit or credit card transactions and if you will be getting a merchant ID number.
Negotiate certain fees associated with opening an account
When opening an account for a cannabis business, you may have to negotiate fees associated with opening an account at the bank (e.g., overdraft fees) or getting a merchant ID number from them. Overdraft fees are a big concern for cannabis businesses because, in many cases, there is no way to predict how much money will come into the business every day. As a result, banks may charge you an overdraft fee if your account balance is negative; however, some banks will cap these charges so that it does not become too burdensome on your business.
Additionally, banks may charge you a fee for getting a merchant ID number; this is usually done via the Automated Clearing House (ACH) system and can cost anywhere between $10-$20 per month, depending on which bank you use. Before signing up with any financial institution, this fee should be disclosed so that you know what kind of costs could come up after starting small but growing quickly into a success!
If you’re looking to open up your cannabis dispensary, doing so will require many steps. One of the first things you need to do is make sure that it complies with local and state laws before opening a shop. Next, ensure that you have all the necessary paperwork for your business to operate legally, from a business license to product liability insurance!
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