Open an Online Bank Account For Your Cannabis Business?

Open Online Bank Account- Are you involved in the cannabis industry and want to open a merchant account? Learn how to open a bank account for your cannabis business.

For upon | The cannabis industry is growing day by day, and it has become more popular after the Farm Bill 2018. Despite many health benefits, there are still some states that don’t allow cannabis products. This is the reason running a cannabis business has yet to be adopted everywhere.

So, it can be challenging for people who want to open cannabis merchant accounts. If you are one of them, this article will help you with the simple steps on how to open a bank account for your cannabis business.

How to Open a Bank Account For Cannabis Business

The below steps will allow you to easily open a bank account for your cannabis business.

Don’t Include Cannabis in Your Company Name

First and foremost, you need to keep one thing in mind there should not be any term related to “Cannabis” in your business name. Keeping your company name that indicates cannabis might create a problem for banking purposes. Some banks may reject your application while reviewing it if there is any cannabis term.

However, you can keep your brand name and business name separate. This is the ideal approach because you can attract your customers through your brand name and use your business name for banking purposes.

Don’t use the terms; W@@D, Dank, 420 in your business name. Although they might sound interesting, banks may consider your business linked to the black market. However, you should follow the legal guidelines and choose a business structure (LLC, Inc., etc.). A strong business structure is essential for growth and development.

Open Two Bank Accounts

Secondly, it’s better to have two bank accounts. It’s because you can use one account for large cash deposits and the other for paying operating costs.

Account 1: For Cash Deposits

You should use this account for your cash deposits. Since cannabis is a lucrative business, you may receive a high volume of cash deposits that may get flagged for involvement in suspicious activity. Having two accounts will help you manage your bills and savings separately, which doesn’t create any problems.

Account 2: For General Operations

You can use this second account to pay your operating expenses and credit card bills. So, you don’t need to worry about getting flagged when you have two bank accounts.

Build a Good Relationship With Your Banker

Open Online Bank Account -One of the crucial parts of opening a cannabis merchant account is to build a personal relationship with your banker. Be it a bank’s teller or the bank manager; when you have a good relationship with them, it can make a difference in many situations.

For example, if your bank account gets a red flag or Suspicious Activity Report (SAR), the bank manager or professionals may help you out in this situation. When you have a strong relationship with your banker, they trust you and have confidence in your business.

According to the law, cannabis businesses or CBD products are not illegal if you legitimately conduct them. Bankers report a red flag for involvement in any fraud or illegal activities in the cannabis industry.

Update Your Business Name on Credit Card Statement

Lastly, don’t use the cannabis terms on your credit card statement too. Follow the #tip1 in this article for your credit card too. Don’t include terms like W@@D, 420, Dank, or any other names used for cannabis. Open an Online Bank Account

So, you should set up your business name so that the name appears on the credit card statement too. In this way, you protect your business from vendors or any customer’s bank reporting your transactions as suspicious. Although this article does not cover the complete setup process, this is the beginning.

The Bottom Line 

Open Online Bank Account -By taking the above steps, you can easily open a bank account for your cannabis industry. As mentioned above, you should keep your company separate from your brand name because including cannabis in your banking accounts may create a problem. Don’t hesitate to seek legal advice if you are unsure about your state and federal laws which can guide you the right way.

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