The SAFER Banking Act of 2025: A New Federal Push with Persistent Gaps
The cannabis and hemp industries continue their rapid growth, but access to reliable financial services remains one of the thorniest compliance and operational challenges. In July 2025, a coalition of 32 bipartisan state Attorneys General renewed calls on Congress to pass the SAFER Banking Act, underscoring how cash-heavy operations in state-regulated markets pose lingering risks for public safety and business transparency. Read the AGs' letter (PDF)
While the SAFER Banking Act (an updated version of the SAFE Banking Act) would not federally legalize cannabis, it is intended to shield financial institutions from liability for serving state-legal cannabis and (by extension) hemp businesses. This could unlock new payment, lending, and investment channels. But as of September 2025, SAFE(R) remains stalled, leaving businesses dependent on a slim field of willing banks and credit unions, and placing robust compliance at the center of any successful account onboarding.
Why Banking Still Matters: Cannabis and Hemp Business Risks Without SAFER
Despite extensive state legalization, most major banks steer clear of cannabis due to federal prohibitions and anti-money-laundering (AML) risks. This has resulted in:
- Predominantly cash-based operations, increasing the risk of theft, loss, and tax noncompliance.
- Difficulty securing loans or credit, slowing industry maturation and consolidation.
- Persistent compliance complexity—every bank that serves the sector must layer on due diligence requirements well beyond standard onboarding.
A passage of SAFER would dramatically expand the pool of financial partners—but won’t eliminate foundational compliance obligations rooted in federal law. Operators must keep pace with FinCEN (Financial Crimes Enforcement Network) expectations and prepare now for higher scrutiny to accelerate onboarding when more banks finally open their doors.
What Does FinCEN Currently Require for Cannabis and Hemp Banking?
FinCEN guidance—originally issued in 2014 for marijuana-related businesses (MRBs) and updated for hemp in 2019 and 2020—establishes that banks may serve state-legal cannabis/hemp businesses if they implement rigorous compliance programs. Key points:
- KYC/KYB (Know Your Customer/Business): Banks must verify entity legitimacy, licensing, ownership/control persons, and ongoing legal compliance.
- Beneficial Ownership: Full transparency is expected for all individuals with 25% or more ownership or controlling interest.
- Suspicious Activity Reports (SARs): Dedicated SAR categories and narratives for cannabis-related clients, with banks required to flag suspected violations, egregious activity, or uncertainty over legal compliance.
- Ongoing Transaction Monitoring: Continuous scrutiny for unusual activity, consistent with heightened risk associated with plant-touching businesses.
- Due Diligence Tailored to State/Local Regulatory Risk: Banks must understand the regulatory framework their client operates in—meaning compliance documentation, COAs, and seed-to-sale reports are routinely required and reviewed.
See FinCEN’s formal marijuana guidance: FIN-2014-G001 and hemp guidance (PDF)
Hemp Isn’t Simple: CBD vs. Intoxicating Hemp Products
A crucial point that compliance teams must grasp is how banks differentiate non-intoxicating hemp CBD products (legal under the 2018 Farm Bill) from intoxicating hemp derivatives (such as Delta-8 THC or Delta-10 THC products).
- CBD/Hemp Banking: Most banks require verified hemp licenses, Certificates of Analysis (COAs) showing THC levels below 0.3%, and compliance with FDA/state labeling. Generally, hemp CBD is viewed as lower risk if not marketed as an intoxicant or making unapproved health claims.
- Intoxicating Hemp: Products that create a psychoactive effect or exploit the "Farm Bill loophole" face higher scrutiny. Many financial institutions decline business, require additional testing documentation, and monitor for regulatory enforcement trends.
If you sell, distribute, or process intoxicating hemp compounds, expect underwriting requirements at least as strict as those for state-legal cannabis—often with more frequent reviews or additional SAR triggers.
What Do Banks Ask for During Cannabis/Hemp Onboarding?
1. State and Local Licenses
Banks typically require valid state and local licenses for all activities—cultivation, processing, manufacturing, and sales/dispensary operations. Licenses must be renewed and in good standing.
2. Certificates of Analysis (COAs)
COAs must come from accredited third-party labs, proving that products meet the legal THC threshold and are free from contaminants.
3. Seed-to-Sale or Track-and-Trace Reports
Cannabis businesses are often asked for access to their track-and-trace system (e.g., Metrc, BioTrack) to verify product inventories, sales, and regulatory compliance.
4. Corporate Documents & Beneficial Ownership
Expect to submit:
- EIN/Tax ID
- Articles of Incorporation/Organization
- Operating agreements/bylaws
- Current beneficial ownership attestation (showing all 25%+ stakeholders)
5. AML/BSA Compliance Policies
Some banks will conduct a mini audit of your compliance program: anti-money laundering policies, employee training, recordkeeping, and evidence of internal controls.
6. Transactional History and Projections
Historical sales data, bank statements, and reasonable forward-looking projections are often requested to help the financial institution model expected risk and cash flow patterns.
SARs and AML Monitoring: Special Considerations for Cannabis Businesses
Per FinCEN guidance, banks must file:
- Marijuana Limited SARs – If the business operates in compliance with state law and does not implicate federal enforcement priorities.
- Marijuana Priority SARs – If the business implicates DOJ priorities, such as diversion to minors, ties to criminal enterprise, or cross-border transfers.
- Marijuana Termination SARs – If the bank stops servicing the account due to evidence of violations or unmanageable risk.
Hemp clients may still be flagged for SARs if a bank believes they are misrepresenting product type, using proceeds for illegal marijuana activity, or failing to meet recordkeeping standards.
Compliance Checklist: Preparing for Cannabis and Hemp Banking in 2025
To maximize your chances of onboarding with a willing bank or credit union now—and to be prepared to move quickly if SAFER passes—cannabis and hemp businesses should:
Licensing and Verification
- Confirm all business and operational licenses are current and match operating activities.
- Document any changes in beneficial ownership immediately.
Track-and-Trace and COAs
- Establish digital records for all COAs and ensure they’re from accredited labs.
- Ensure seed-to-sale/tracking logins and records are exportable and audit-ready.
Corporate Paperwork
- Maintain updated company docs—operating agreements, EIN, articles of incorporation/organization, proof of principal address, and ownership attestation.
Compliance Program
- Develop and regularly update your AML/BSA compliance policy.
- Train staff on red flags and SAR indicators, document staff training.
- Create a designated compliance officer role, even if part-time.
Financial Controls
- Keep business and personal finances strictly separated.
- Prepare bank-ready financial summaries and be transparent about sales sources.
For Hemp Brands
- Monitor state and federal movement on intoxicating cannabinoids and be ready to respond to new restrictions.
- Be able to demonstrate THC compliance for every batch and product line.
What Should Cannabis and Hemp Teams Expect if SAFER Passes?
The immediate effect of SAFER would be a wider pool of banks and credit unions willing to take on state-legal cannabis and hemp clients. However, robust compliance processes won’t disappear:
- Banks will still need to comply with BSA/AML requirements and file SARs as appropriate.
- Onboarding probes and ongoing verification will remain the norm, especially while cannabis remains Schedule I at the federal level.
- With better bank access comes greater visibility and federal scrutiny; documentation and transparency will be rewarded.
Take Action: Get Your Compliance House in Order for 2025
2025’s banking landscape is in transition—but not yet solved. No matter what happens in Congress, being proactive about compliance is the best investment for cannabis and hemp businesses.
Are you ready for the next phase of cannabis banking? Bookmark CannabisRegulations.ai and leverage the latest tools and updates to stay ahead on licensing, compliance, and regulatory changes that impact your financial options.
