Cannabis Business Banking in Louisiana

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Louisiana Efforts to Address Marijuana Banking Issues

Louisiana has made strides to alleviate banking challenges. In 2020, the Louisiana Office of Financial Institutions (OFI) issued guidance urging banks to adhere to federal recommendations while working with cannabis-related businesses. This includes implementing stringent anti-money laundering protocols and conducting detailed due diligence. While the OFI’s efforts provide a roadmap, compliance remains a costly and labor-intensive process for most institutions.

  • Louisiana currently has two licensed manufacturers and as many as 30 authorized dispensaries, including satellite locations.
Banks, Credit Unions, and Fintechs that offer banking services to Cannabis, CBD, and Hemp Businesses in LA Type of Financial Institution
Amalgamated Bank Bank
Chase (CBD Only) Bank
Element Federal Credit Union Credit Union
Farmers Bank & Trust Bank
Green Check FINTECH
Herring Bank Bank
Safe Harbor Financial FINTECH
  • Are you a Louisiana-licensed financial institution providing banking services to cannabis-related businesses? Request to be listed .

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Risks for Financial Institutions

For banks and credit unions, the decision to work with cannabis businesses is fraught with risks:

  • Federal Legal Risks: Handling funds from cannabis operations, which are federally illegal, could violate anti-money laundering (AML) laws. Financial institutions risk severe penalties, including fines and imprisonment.
  • Regulatory Compliance Challenges: The Financial Crimes Enforcement Network (FinCEN) mandates enhanced due diligence and frequent Suspicious Activity Reports (SARs) for accounts tied to cannabis businesses, adding to operational costs and administrative burdens.
  • Reputation and Operational Risks: Banks could face reputational damage from associations with the cannabis industry. Moreover, the predominately cash-based nature of cannabis businesses poses security risks and complicates cash management.
  • Uncertain Legal Landscape: The ever-changing state and federal laws regarding cannabis exacerbate uncertainty. While the proposed SAFE Banking Act aims to ease restrictions, its repeated failures to pass leave financial institutions in limbo.

Different Payment Operations for Cannabis-related Businesses

Business Cash Credit Cards ACH/E-Checks Specialized Processors Cryptocurrency
Dispensaries Widely used Limited (via cannabis-friendly providers) Often used Cannabis-specific Limited
CBD Shops Sometimes Frequently available Common Some high-risk providers Rare
Hemp Shops Occasionally Readily available Common Rarely needed Rare

Federal Legislative Push: The SAFE Banking Act

At the federal level, the SAFE Banking Act continues to garner attention. If passed, the act would prohibit federal regulators from penalizing financial institutions that serve state-legal cannabis businesses. Supporters, including industry advocates and state financial regulators, argue the act could provide a safer, more stable framework for cannabis banking. However, the legislation’s uncertain future leaves stakeholders without a clear solution.

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