Understanding Cannabis Banking

Commonly Used Terms »


  • Cannabis: Cannabis is the plant that marijuana and hemp are derived from.
  • Marijuana: Marijuana is one of the products derived from the cannabis plant. A marijuana plant is a cannabis plant that contains a certain amount of tetrahydrocannabinol (THC). In Maine, a cannabis plant with more than .3 percent THC is considered a marijuana plant. Marijuana is a Schedule 1 drug under the Controlled Substances Act [Note that although cannabis and marijuana are not the same, the words are often used interchangeably].
  • Hemp: Hemp is another product derived from the cannabis plant. A hemp plant is a cannabis plant that contains a certain amount of THC. In Maine, a cannabis plant with .3 percent or less THC is a hemp plant. Hemp is not scheduled under the Controlled Substances Act.
  • Cannabidiol (CBD): CBD is a product derived from either a marijuana plant or a hemp plant. When it is derived from marijuana, it is a Schedule 1 substance under the Controlled Substances Act, and when it is derived from hemp, it is an unscheduled substance.
  • Dronabinol (Marinol): Marinol is an FDA-approved synthetic form of marijuana used to treat severe nausea and vomiting.
  • Epidiolex: Epidiolex is an FDA-approved drug made with CBD that is used to treat seizures.
  • Bank Secrecy Act (BSA): Under the BSA, financial institutions are required to assist U.S. government agencies in detecting and preventing money laundering.
  • Financial Crimes Enforcement Network (FinCEN): FinCEN is a department of the United States Department of the Treasury that analyzes information about financial transactions to ensure money is not going towards illegal ventures, terrorist financing, or other financial crimes.
  • Suspicious Activity Reports (SARs): A suspicious activity report is a document that financial institutions are required to file with FinCEN whenever there is a suspected case of money laundering or fraud. Because marijuana remains illegal at the federal level, financial institutions are subject to increased SARs requirements for marijuana-related accounts. SARs must be filed regularly, even when nothing seems to be wrong.
  • National Credit Union Administration (NCUA): The NCUA is a federal agency that regulates and supervises federal credit unions. The NCUA is the regulatory body that ensures credit unions implement the BSA requirements. It also operates and manages the National Credit Union Share Insurance Fund, which insures all federal credit unions and almost all state-chartered credit unions.

If cannabis is illegal at the federal level, how are businesses in states where cannabis is legal avoiding prosecution? »


  • When the Department of Justice issued the Cole Memo in 2013, it outlined a list of priorities for the Department to focus on when prohibiting the sale of marijuana. The list includes things like preventing the distribution of cannabis to minors, preventing the revenue from the sale of cannabis from going to criminal enterprises, gangs, and cartels, preventing cannabis from moving from states where it is legal into states where it is illegal, preventing state-authorized cannabis activity from being used as a cover for illegal activity, and preventing violence and the use of firearms in the cultivation and distribution of cannabis. The memo provides guidance to Department attorneys and law enforcement to focus their prosecutorial resources on organizations whose conduct interferes with one or more of these priorities, regardless of state law. So long as states regulate their cannabis markets to ensure the goals of these priorities, the Department of Justice will deprioritize enforcement against marijuana businesses.
  • In 2016, a Ninth Circuit Court case, United States v. McIntosh, created an additional standard that would further prevent the Federal Government from enforcing the Controlled Substances Act in states with legal cannabis markets as long as the businesses in those states remained in “strict compliance” with state laws. Even though this case is not legally binding in Maine, it is a good indicator of how cannabis law is progressing and should be seriously considered.
  • The overlap between the Cole Memo and U.S. v. McIntosh also positions state regulators in a difficult situation. If they want to receive protections under the Cole Memo, they must regulate their markets in adherence with the restrictive priorities created under the memo, while also ensuring their regulations are simple enough that cannabis businesses are able to “strictly comply” with those regulations.

How large is the cannabis market? »


  • As of 2021, 18 states and the District of Columbia legalized cannabis for recreational use, and 36 states and four territories allow for the medical use of cannabis products. Every state has its own rules regarding cultivation, possession limits, and sales.
  • Nationwide cannabis sales increased 67% in 2020, with total sales in that year reaching 11.6 billion U.S. dollars.
  • The U.S. cannabis industry is worth $61 billion and is projected to be worth $100 billion by 2030.
  • From October of 2020 to August of 2021, Maine’s cannabis sales totaled $49.1 million, with the month of August alone having a sales value of $10.2 million.

What do the medical cannabis programs look like in Maine and in other states? »


  • One of the most notable differences among state medical cannabis programs in New England is the way they use a “Caregiver” program. In Massachusetts, individual patients can designate a “personal caregiver” to cultivate medical cannabis products for them if they are unable to access a state-authorized dispensary or if they can verify “financial hardship”. In Vermont, registered caregivers are people who have agreed to undertake responsibility for managing the well-being of a registered patient with respect to the use of cannabis for symptom relief. The patient may only have one registered caregiver at a time, and caregivers may only serve one registered patient at a time. New Hampshire allows patients to designate one caregiver to procure their medical cannabis products for them, but neither the patients nor the caregivers may cultivate cannabis under any circumstances.
  • In Maine, caregivers can treat as many patients as they can from their limited harvest and can hire as many employees as needed. This caregiver program is a significant departure from the programs in Massachusetts, Vermont, and New Hampshire, as well as the original caregiver program in Maine, which was more restrictive.

What do states do to ensure they are operating within the priorities set out by the Cole Memo? »


  • In Maine, the adult-use cannabis program is required to use a track-and-trace, or seed-to-sale system to ensure safety. The State’s medical cannabis program is not required to use any tracking system. Maine is the only state with an adult-use and medical program that does not require seed-to-sale tracking for both programs.
  • Different states require different parts of the plant’s life cycle to be tracked and different things to be tested for. Many states use Metrc as their provider for a regulatory system, and within Metrc, licensees can track the details required by their specific state regulations.

What does Maine’s regulatory environment look like? »


  • Over the past few years, more and more states have established legal cannabis markets. States like California and Massachusetts have seen significant increases in proposed legislation related to their cannabis markets.
  • Medical cannabis is considered medical treatment and in Maine, this type of information is confidential, even to the state or municipalities. In other states, this type of information is provided to the appropriate regulatory body to allow for track-and-trace. In Maine, state law prevents the regulatory body from using the information from the medical program.
  • As states across the country expand and become more adept at implementing their cannabis programs, the Federal Government and the Department of Justice are expecting more from states and cannabis-related businesses even though there have been no changes to federal laws, regulations, or guidance.
  • Maine credit unions and industry leaders are reporting that credit unions who have been working with cannabis-related businesses are now needing to adjust their practices to fit the enhanced oversight and security expectations.
  • These enhanced requirements will demand more time, energy, and work on the part of Maine’s credit unions, and it is possible their members might experience increased scrutiny, fees, or information requests.
  • One of the places this can be expected is in the area of confidentiality. Because medical cannabis is considered a medical treatment, much of the information regarding the patient using the product is confidential. In Massachusetts, New Hampshire, and Vermont (and all other states with a medical cannabis program), the confidential information is explicitly shareable to the regulatory body overseeing the state’s cannabis program. This enables the regulatory bodies to use the information in their track-and-trace and seed-to-sale systems to ensure the cannabis products and profits go where they are supposed to go. Maine’s statutory scheme does not make the confidential patient information shareable to the State, and as a result, the information is not currently being used in a seed-to-sale program. As expectations become more significant, in order to maintain a cannabis-related business account, the business may need to provide more information to their credit union or bank than is required of them under Maine law.

Advocacy Efforts »


The Maine Credit Union League has consistently advocated for increased access to financial services for cannabis-related businesses (CRB). Working with our industry partners, we have been working at the federal level to promote the passage of the SAFE Banking Act. While this legislation is crucial for expanding access to financial services for CRBs, the bill in its current form will not change or mitigate the new expectations and requirements being imposed on credit unions by state and federal regulators.

Because the new regulatory environment may cause frustration and uncertainty, the League has been vocal in expressing our concerns to credit union regulators, state and federal elected officials, and other interested parties. We believe is imperative that legal Maine businesses have access to the financial tools they need to safely and effectively operate, grow, and contribute to our economy.

The League has sent a letter to government officials explaining the situation and various policies that may arise.