Keeping pace with the ever changing state and federal regulations of being a cannabis employer is complicated. A misstep can be financially devastating.

Maryland cannabis companies facing ridiculously high fees to access traditional banking services – We can help

By Jacquelynn Entwistle| September, 2021

Running a business in general can be difficult as it tends to be very high risk, high reward. Running a cannabis business can be even more difficult. Though we are seeing more and more states legalize the drug and allow businesses to open and operate within specific state municipalities, cannabis is still federally illegal. As a result, many cannabis companies are typically denied traditional banking services because those very few financial institutions that do service the cannabis industry are technically holding what the federal government still considers to be “drug money.”

Even though the number of banks willing to service cannabis companies is increasing, most refuse to do so until cannabis is federally legal. This means that at least 70% of cannabis businesses operating in the U.S. are still cash-only.

According to a federal survey conducted in 2020, 1 in 20 older Americans say they regularly smoke marijuana. According to an April 2021 Pew Research Center survey, 91% of U.S. adults say marijuana should be legal for both medical and recreational use. 

A quick Google search revealed that “Cash vs credit card statistics show that 80% of consumers prefer spending with a card over cash. This 80% breaks down to 54% of consumers who prefer spending with debit cards and 26% of consumers who prefer spending with credit cards.”

See where I’m going with this? Let’s take a look at the banking options available to the cannabis industry in Maryland, for instance.

There are more than 80 different banks in Maryland. Out of those 80, only three will service the state’s medical cannabis businesses. Cannabis companies with bank accounts can accept debit cards, purchase products from other businesses via wire transfer, and pay their employees directly from a bank account (93% of U.S. employees are paid by direct deposit, according to a Paycor survey).

To that point, however, cannabis companies that have the option to work directly with banks, and take advantage of traditional banking services, often end up spending tens of thousands of dollars annually just by opening and operating a bank account. 


Click here to learn how we can make that process easier for you.

If Congress passes the Secure and Fair Enforcement Banking Act (The SAFE Act), federal law will prohibit regulators from penalizing financial institutions for the sole reason it does business with a cannabis company. Passing this act would remove the need for banks to charge hefty risk fees to cannabis companies and reduce the overall price of running a cannabis business bank account.

This bill would also grant cannabis entrepreneurs access to things like small business loans, mortgages, credit lines and other banking services that are necessary for starting a business if you do not already have access to large pools of existing capital.

Until that happens and even then, AdaptiveHR exists to help. We aim to assist with the costly benefit of working with the very few banks that offer traditional banking services to cannabis businesses. We help bridge the gap between you, as a business owner, giving your employees what they want and being able to do so at an affordable cost. We partner with banks across the nation, and we offer customized payroll operations to our cannabis business owners. By allowing us into the mix, you satisfy your employees’ preferences, reduce operations costs, and minimize administrative tasks.

Contact one of our HR Professionals today if you are interested in learning more or have any immediate questions. We are eager to help your business thrive!

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