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420 Friendly Banking Guide: What to Look for in a Marijuana Bank

Searching for a 420 friendly bank? Cannabis is no longer a small-time cottage industry; it’s a multi-billion-dollar marketplace boasting hundreds of growers and dispensaries. In fact, the cannabis industry is estimated to exceed $30 billion in 2020. With more and more cash flowing into cannabis-related businesses, finding a 420 friendly bank is of paramount importance.

Any seller, grower, or banker can tell you; the industry is chronically underbanked. Part of the problem is the stringent government legislation in place since 2014 that has put a stranglehold on cannabis banking development. Big banks and financial institutions rarely, if ever, open accounts for cannabis-related business. That means for the thousands of companies reliant on marijuana for their profits turned to smaller, localized marijuana banks and credit unions.

But with such stringent legislation, these smaller, newer enterprises often struggle to keep up. Despite there being more than 300 US banks and credit unions catering to cannabis businesses, the result is all too often that such financial institutions are shut down for poor compliance. That puts dispensaries and others in a challenging situation.

To avoid the stress and panic of bank shutdowns, you must carefully select what 420 friendly banks to go with. In this article, you’ll learn what to look for in a marijuana bank so that you can store your money safely and securely.

420 Friendly Banking Guide

Apply for a cannabis banking account or cannabis business loan with Safe Harbor Financial!

 What is a 420 friendly bank?

In early 2021, the Financial Crimes Enforcement Network reported that 515 banks and 169 credit unions provided services to cannabis-related businesses. This comes after 36 states legalized medical marijuana, and 17 states permitted recreational adult use.

A 420 friendly bank, therefore, is any bank or similar financial institution that provides financial services, like loans or checking accounts, for marijuana-related businesses.

It is often hard to tell which banks do and do not offer such services – as it isn’t commonly advertised. In general, each financial institution will have internal policies limiting the number of high-risk customers they can take on. Even 420 friendly banks may refuse a potential client if the risk level is too great. Indeed, major banks seldom take on cannabis-related businesses for this exact reason.

What to look for in a 420 friendly bank?

Are you hunting for a bank to handle your financial transactions? Do you want to avoid storing cash on your property? If so, you need a 420 friendly bank. But with a growing number of institutions from which to pick, determining which bank to go with is easier said than done.

Here are some key factors to guide your decision:

420 banking tips for marijuana-related businesses

Navigating the web of legal and regulatory requirements can seem confusing. Here are three simple but practical tips to reduce your difficulties:

  1. Documentation. Documentation. Documentation. That’s right. I’ll say it again: sort out your documentation! Any bank, including 420 friendly banks, should do their due diligence when opening your account. That means you will need to produce copies of your marijuana license, sales records, and inventory logs. Any information pertaining to the business should be ready. Moreover, any financial institution that does not ask for such information should be blacklisted – it’s a major red flag.
  2. Be honest. Transparent and open communication is essential to any bank-business relationship. That’s doubly true in the cannabis industry. Keep your bank updated on all changes in your business activity. And stay honest about the nature and structure of your business. That way, your account won’t be flagged as suspicious, and you remain legal and fully compliant.
  3. Avoid illegal practices. Any financial institution offering workarounds for legislation or regulations is a red flag. All banking practices must comply with the Financial Crimes Enforcement Network’s guidelines. You must never attempt to conceal or disguise the cannabis-related nature of your business, for example, using intermediaries to deposit cash.


Despite the teething issues for the cannabis-related banking industry, the work of 420 friendly banks is getting easier. In 2022, the SAFE Banking Act looks set to pass into law. This will prevent federal investigators from penalizing any financial institution working or associated with a marijuana-related business. The result will likely be an opening of the market – as more and more 420 friendly banks cash in on the growing industry.

For now, however, remain cautious about your choice of 420 friendly banks. They should be experienced, transparent, efficient, and, most of all, 100% above board. Don’t trust backstreet banking. It’s not worth your time or hassle.

Join our 420 friendly bank!

Do you own a hemp, CBD, dispensary, marijuana, or cannabis business and need a business bank account? We’ve validated over $8 billion dollars in cannabis-related funds since 2015. Bank with confidence. Bank with Safe Harbor Financial today.

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Do you own a hemp, CBD, dispensary, marijuana, or cannabis business and need a business bank account? We’ve validated over $8 billion dollars in cannabis-related funds since 2015. Bank with confidence. Bank with Safe Harbor Financial today.

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