5 Safe Banking Alternatives For Cannabis Companies

Every month, staffers at NUG, a vertically integrated cannabis company in California, have to physically transport cash, accompanied by a licensed and armed security guard, via an inconspicuous company vehicle to a Pacific Gas and Electric office — to pay their utility bill. 

This may sound extreme, but it’s an all-too-common scenario among cannabis entrepreneurs. Despite weed’s legal status in most states and Washington, D.C., most federally insured banks won’t open accounts for marijuana businesses. The reason: fear of criminal or civil liability under federal law, which still classifies cannabis as a Schedule 1 drug.

For this reason, cash has become the go-to option for most cannabis transactions. Companies like NUG, which grows plants and manufactures cannabis products at several facilities in the Oakland, Calif., area, accrue mountains of greenbacks and have nowhere to deposit them except locked vaults. 

“Everything is set up like a casino,” NUG founder and CEO John Oram says of the company’s headquarters. It has vaults and electric bill counters. Every time cash changes hands, two employees must be present. NUG hires armed guards for deliveries of cash from dispensaries and asks drivers to change up their routes so as to not be predictable to robbers. Its 200 employees are paid in envelopes of cash, causing them their own banking hassles. Even taxes are paid this way.

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Oram hopes to alleviate these issues by working with Pacific Banking Corporation, which offers wire transfers, cash deposits, and other services — all for two cents for every dollar it processes. Until federal laws change, Oram says it’s one of his few solutions.

Pacific Banking Corporation is just one of many “banking service companies” that have sprung up in recent years. These services offer workarounds for businesses in need of a way to store and transfer large amounts of paper money. For a fee, and an intense amount of scrutiny to avoid suspicion of money laundering, they will handle some of the needs a traditional bank would.

Here are some of the more widely used services.


Founded by two attorneys, PayQwick works much like PayPal. Payers and payees put money into a system and can transmit it back and forth and even transfer funds to and from bank accounts. The app is useful at every point on the transaction line — from customers at the dispensary counter to growers buying seeds and soil. Expanding to states as they legalize, the company has state-issued money-transfer licenses, allowing transfers over state lines. PayQwick also takes on the compliance issues that are usually the responsibility of banks, such as due diligence and suspicious activity reports. 


CanPay is a debit app that can be linked to a checking account. The goal, says CEO Dustin Eide, is to “treat the customer and merchant so they have Mastercard- or Visa-level functionality.” Initial customers pay no convenience fee and are limited to $250 worth of transactions a day. Retailers, who pay a 1.85 percent fee on transactions, have to apply to utilize the service and must partner with one of the more than 50 banks in CanPay’s network. The app is available at 400 cannabis businesses, both recreational and medical dispensaries. So far, CanPay assists only retail-level buyers and sellers.


Hypur is a banking and payments technology provider that financial institutions use to bank highly regulated industries, including cannabis. One of its free services is to play sort of matchmaker, pairing cannabis companies with the appropriate bank or credit union, even if that institution is not a client. “We have a clear perspective on who is truly banking for this industry throughout the country,” says Tyler Beuerlein, executive vice president of business development. Depending on the type of operator, the state where it’s located, and the type of business, Hypur will make an introduction or help point it in the right direction.

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Dama Financial

The company has built a network of FDIC-insured bank partners that are open and interested in taking on cannabis-related businesses. Cannabis companies must fill out a free detailed online application and allow an on-site inspection. Once a company is accepted, Dama manages its banking services — providing armored carrier services that pick up cash and take it to a processing facility for deposit, and accepting deposits through ACH wire or check. Generally, the money shows up in accounts the next business day. 

Small And Local Banks And Credit Unions

The federal government doesn’t like banks and credit unions managing accounts for marijuana businesses, so most are nervous that doing so may leave them open to trouble. “People who have been in [banking] for decades work to minimize risks,” says John Chiang, former California state treasurer and current adviser to the cannabis group Calyx Peak Companies. Recently, some smaller banks have been receptive to the plight of well-organized cannabis businesses. “Previously, banks would not publicly acknowledge that they were working with cannabis companies­ — or there was an automatic no,” Chiang says. “Now there are deeper conversations happening.”

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