Three dozen U.S. states have legalized medical cannabis and 17 states have begun to regulate adult-use as well. But even with this major market, many cannabis businesses find it difficult to obtain financial services from traditional institutions.

Federal prohibition of cannabis has kept banks and credit unions hesitant to provide services to cannabis-related businesses. Regulators have indicated that they won’t bring down the regulatory hammer, but that has provided little comfort to the financial services industry. Taking on cannabis-related businesses also means a high level of paperwork and tracking of cannabis accounts, because if they don’t, a financial institution fears it will face charges of allowing “money laundering.” Credit card processors often feel the same, and they also want to avoid liability.

More and more cannabis banks have slowly been opening their doors to cannabis-related clients over the years, though this has been stalled somewhat by the anticipation of the Secure and Fair Enforcement (SAFE) Banking Act passing. That bill remains up in the air regarding whether it can pass this year and there is a lot of hope, but only time will tell.

Without help from many traditional financial services, cannabis companies often must rely on cash. This can make a business’s facilities a target for thieves, and cash is a difficult asset to claim stolen to your insurance provider.

But cash isn’t the only alternative — Cryptocurrency is continually becoming a more popular form of payment and is available to cannabis-related businesses. Cryptocurrency exchanges are not regulated as heavily by the federal government as traditional financial institutions are, making it easier to open an account.

Some of the benefits that crypto has to offer cannabis businesses:

  • No cash required: If a cannabis producer, distributor, or manufacturer accepts Bitcoin (BTC) or other digital currencies as payment, your customers don’t have to bring in a stack of cash or exact change.
  • Lower fees than banks: Due to federal prohibition as the norm, traditional banks are likely to charge a premium for their normal services to cannabis-related companies. Crypto banking has lower fees and cannabis companies are treated like any other company on the exchange.
  • Transparency: To keep a state license, cannabis companies must comply with a number of protocols to ensure there is no money laundering or distribution of cannabis in unapproved ways. The blockchain technology behind cryptocurrency provides a tamper-proof receipt of every transaction and every step in the supply chain.
  • Go International: Cryptocurrency can help cannabis-related businesses make payments to international companies such as suppliers of labels, packaging, etc.

It’s not all roses, though. Cryptocurrency is a more volatile currency than the U.S. dollar, and its value can fluctuate wildly. Cryptocurrencies are also taxed differently and keeping track of all the correct details can be costly and time-consuming.

Stablecoins are also an option, as they are tied directly to the price of the U.S. dollar or of gold. Definitely do your research to avoid the scams and find the type of currency that will work well for you.

Which cryptocurrency do you think is the most suited to work for a cannabis company? Let us know in the comments.

About the Author: Brian Ellis

With 6 years' experience in business journalism, Brian is the person we turn to for anything related to the business of cannabis. His news coverage spans topics including marijuana business and finance. Brian's work features on,, , and