Cannabis Banking: The Records Your Bank and the IRS Expect You to Keep

What does FinCEN's 2014 cannabis guidance require?

In February 2014, the Financial Crimes Enforcement Network (FinCEN) issued guidance (FIN-2014-G001) explaining how banks can serve marijuana-related businesses consistent with their Bank Secrecy Act obligations. It's still the framework banks and credit unions use today, even though the Department of Justice memo it originally referenced was later rescinded.

Under that guidance, a bank is expected to:

• Verify the business is licensed and registered with the state, and review license applications and related documents.
• Understand the business's normal activity, including the types of products sold and customers served.
• Monitor ongoing activity for red flags, including through publicly available sources.
• File suspicious activity reports (SARs) using three categories: Marijuana Limited for businesses that appear to be operating within the guidance, Marijuana Priority where the bank sees red flags, and Marijuana Termination when it ends the relationship.

Note that the April 2026 order moving state-licensed medical cannabis to Schedule III did not, by itself, eliminate banks' compliance programs. Expect your bank's requirements to stay in place until it tells you otherwise.

Separately from SARs, banks file a currency transaction report (CTR) for cash deposits or withdrawals over $10,000 in a business day. For most dispensaries that means CTRs are filed regularly. That's normal and expected; it's simply part of operating a cash-intensive business.

What records will your bank ask for?

Requirements vary by institution, but most cannabis banking programs request some combination of:

• Current state licenses and any local permits, plus notice of renewals or changes
• Ownership and beneficial-owner information, with updates when it changes
• Financial statements, often monthly or quarterly
• Sales reports from your POS and state track-and-trace data (such as Metrc) so the bank can compare reported sales to deposits
• Explanations for unusual deposits, large changes in volume, or new revenue streams
• Tax filings and proof that state excise and sales taxes are being paid
• Site visits or compliance questionnaires on a periodic schedule

The single most useful thing you can do is make sales and deposits easy to tie out. If POS cash sales for the week are $80,000 and deposits are $80,000 plus or minus a documented change-fund difference, the review is short. If they don't match and nobody can explain why, it isn't.

Build a monthly bank package

Rather than scrambling when the bank asks, assemble the same package every month as part of your close: the POS sales summary by tender type, the Metrc sales report, the bank and vault reconciliations, a deposit-to-sales tie-out with explanations for any differences, and copies of state tax filings and payment confirmations. When the request comes, you send a folder instead of starting a project. The same package doubles as audit support if the IRS ever asks how you know your reported gross receipts are complete.

How should you document cash deposits and armored car pickups?

1. Count and log under dual control.Every cash bag leaving the vault should be counted by two people and recorded in the vault log with a bag number. Our dispensary cash controls guide walks through the full process.
2. Keep the pickup receipt.The armored-car receipt should match the vault log entry by bag number and amount.
3. Match the bank credit.When the bank credits the deposit, match it back to the receipt. Book the movement through a cash-in-transit account so you can see anything still outstanding.
4. Document differences.If the bank's count differs from yours, keep the bank's adjustment notice and record the difference to cash over/short with an explanation.
5. Never structure deposits.Breaking up deposits to avoid the bank's $10,000 currency transaction reporting is a federal crime called structuring, even if the cash is entirely legitimate. Deposit what you have, on a regular schedule.

When does a cannabis business have to file Form 8300?

Form 8300 is your obligation, separate from anything your bank files. A trade or business that receives more than $10,000 in cash in a single transaction, or in related transactions, generally must file Form 8300 with the IRS within 15 days of receiving it, and must give the payer a written statement by January 31 of the following year.

For a dispensary, single retail sales rarely approach that level. The more common triggers in cannabis are:

• Wholesale sales between licensees paid in cash
• Installment payments on a single large transaction that together exceed $10,000
• Cash received for equipment, real estate or other business assets

Form 8300 has its own definitions, including when cashier's checks and money orders count as cash and how related transactions are aggregated. Many businesses are also required to file it electronically. Confirm the details for your situation with your tax advisor before relying on a general rule.

What happens if your bank closes your account?

Account closures happen, sometimes because of red flags and sometimes because a bank exits the industry altogether. Under the FinCEN guidance, a bank that terminates a cannabis relationship files a Marijuana Termination SAR, and other institutions may learn of it during their own due diligence.

You can reduce the damage by preparing before it happens:

• Keep a current package of licenses, ownership records, financial statements and recent reconciliations ready to hand a new bank.
• Maintain a relationship with a backup institution if you can.
• Keep your books current so you can show clean, reconciled cash at any point. Banks are reluctant to onboard a business whose records are months behind.
• Have a short-term plan for payroll, taxes and vendor payments if accounts are frozen during a transition. A 13-week cash flow forecast helps here.

How should you account for cannabis banking and cash-handling fees?

Cannabis banking is expensive. Monthly compliance fees, per-deposit cash handling fees, armored-car charges and payment-processing costs add up quickly. Record them in separate accounts so you can see what cash actually costs you:

For adult-use activity, these are generally ordinary business expenses, which means Section 280E disallows the deduction federally. For state-licensed medical activity on or after April 28, 2026, 280E generally no longer applies, so dual-license operators should allocate shared banking costs between licenses using a reasonable, consistent, documented method. Our Schedule III guide covers allocation, and we handle this as part of cash management engagements.

Frequently asked questions

Published October 21, 2026 by Cash Crop CFO. General information only, current as of publication, and not legal or tax advice for your specific situation.