In April 2026, the federal government moved medical cannabis to Schedule III of the Controlled Substances Act, the most significant change to marijuana’s federal status in more than 50 years. Over the summer, a Drug Enforcement Administration hearing took up the larger question of whether adult-use cannabis should follow, wrapping in mid-July with a recommendation still pending. For an industry that has spent more than a decade largely locked out of ordinary financial services, it read like a turning point. The banking rules, however, did not change.
Rescheduling recognizes that cannabis has accepted medical use and eases certain federal restrictions, but it does not create a safe harbor for the banks and credit unions that serve the industry. Schedule III is not legalization, and financial institutions remain bound by the same federal compliance obligations they carried before the order. The distance between what the change appears to mean and what actually governs cannabis banking is the environment operators continue to work in.
Black Hills Federal Credit Union has been serving cannabis businesses since 2023, and its experience offers a clear view of how financial institutions actually work with licensed operators, what those operators need from a banking partner, and where the system continues to fall short.
What Rescheduling Actually Changed
For the institutions that bank the industry, the April order had far less practical effect than the coverage suggested. Austin Trapp, a High Risk Business Specialist at BHFCU who works directly with the credit union’s cannabis members, describes it in plain terms.
“At this time, the rescheduling has not changed any banking practices in how we monitor our cannabis members,” Trapp said. The enhanced due diligence, the elevated reporting, the continuous license tracking, all of it continues exactly as it did before.
The order signaled possible future change without altering current requirements. Trapp said the credit union “remains hopeful that, with the rescheduling, the changes related to enhanced due diligence will be implemented in the near future.” For now, the work of banking a cannabis business looks the same in the second half of 2026 as it did in the first. Rescheduling alone was never going to open banking access. That requires either an act of Congress or a financial institution willing to take on the compliance work without it.
Why a South Dakota Credit Union Entered Cannabis Banking
BHFCU is not a large national bank entering the space for a new revenue stream. Founded in 1941 and headquartered in Rapid City, it is a member-owned credit union built on the cooperative model that credit unions have used for generations. When South Dakota voters approved cannabis at the ballot box in 2020, the credit union began studying whether and how it could serve the businesses that would follow.
The reasoning Trapp offers goes back to what a credit union is for. “Our purpose in exploring how to work with these businesses stems from the reason credit unions were developed: to serve underserved communities,” he said. “We realized that cannabis entities did not have equal access to banking options, which gave us the opportunity to assist in the way we know best.”
Cannabis has been one of the most conspicuously underbanked legal industries in the country. Because marijuana remains federally controlled, most large banks treat cannabis proceeds as carrying unacceptable regulatory risk and decline the business outright, leaving operators to move large volumes of cash, pay employees in cash, and seek out the small number of institutions willing to serve them. Federal data has long shown only a few hundred banks and credit unions filing the reports required to serve the sector nationwide, a small total relative to the size of the industry.
BHFCU’s reach is national in principle but deliberate in practice. The credit union has the ability to serve cannabis-related businesses across the United States, but it does not automatically bank operators everywhere. Before taking on a business in a state or tribal nation where it does not already work, BHFCU reviews both the general banking laws and the specific cannabis ordinance of that jurisdiction, then monitors those rules on an ongoing basis for changes that could affect its ability to bank or that could hurt its members. In each case, entering a new market requires substantial legal review before any account is opened.
What Operators Get, and What Compliance Requires
For an operator, the appeal of a dedicated cannabis program is that it functions like ordinary business banking. Through its cannabis banking program, BHFCU offers members the full range of depository products, checking, savings, and certificates, along with the payment tools most businesses take for granted: debit cards, checks, wires, and ACH origination. It also extends real estate lending, some equipment lending, and credit cards to cannabis members.
“We can give potential members what they need and guide them on the different products if they are unsure,” Trapp said. Much of the early work involves helping an operator who arrives asking for one product understand the full set of tools available to a banked business.
Behind those standard products sits a compliance process that ordinary business accounts do not require. Banking a cannabis business means continuously demonstrating, to federal satisfaction, that the money is clean. “Financial institutions are required to make a reasonable determination that the funds coming into the account are from legitimate state-legalized sales,” Trapp said. In practice, that means collecting a member’s point-of-sale data and reconciling it against the deposits that hit the account, a degree of scrutiny ordinary business accounts do not receive.
Because cannabis remains a cash-intensive business, the reporting volume runs high as well. Institutions that serve marijuana-related businesses file suspicious activity reports on those accounts as a matter of routine rather than exception, under guidance the Financial Crimes Enforcement Network issued in 2014 and has never rescinded. Those filings follow a set rhythm, an initial report when the relationship begins and continuing reports on a recurring cycle for as long as the account stays open, and they sit on top of the ordinary anti-money-laundering obligations every bank carries. Alongside the reporting, BHFCU maintains current records on each member’s licenses, business operations, and ownership, and updates them as those details change.
That workload is the reason cannabis accounts carry a fee that an ordinary business account does not. The premium is often a point of friction for operators, but it covers the specific, labor-intensive compliance required to keep the account aligned with federal expectations.
Where Cannabis Banking Still Falls Short
For all that a mature program can offer, Trapp is direct about where the system continues to fail operators, and the shortfall is not unique to his credit union. Deposits and payments have become increasingly accessible for cannabis businesses. Access to capital has not.
“Cannabis businesses remain at a disadvantage: products cannot be used as collateral due to licensing requirements, whereas in other industries this is possible,” Trapp said.
Most lending requires collateral, and a cannabis operator’s most valuable asset, its inventory, generally cannot be pledged the way businesses in other industries borrow against their stock. The state license that makes the product legal cannot simply transfer to a lender in a default, which leaves the inventory largely unusable as security. The result is an industry with growing access to accounts and very little access to credit. Trapp identifies lending as the single biggest area for improvement in cannabis banking, and it is a gap the whole sector shares.
The obvious remedy is federal legislation, and it is back on the table. The SAFE Banking Act returned to Congress in 2026, this time extending its proposed protections to the ancillary businesses and hemp operators that support the industry. The bill has cleared the House repeatedly over the years and stalled as many times in the Senate, and even its sponsors frame it as necessary despite the recent rescheduling rather than because of it.
BHFCU has not structured its program around whether the bill passes. “The passing of the SAFE Banking Act will not affect the day-to-day operation of our cannabis program,” Trapp said. “We have built our program around other federal guidance to ensure we act and work with cannabis entities in ways that align with federal expectations.” Those guardrails, he said, include FinCEN’s guidance, the federal enforcement priorities once laid out in the Cole Memorandum, and the 2018 Farm Bill, a framework that gave the credit union the confidence to enter cannabis banking years before Congress acted and that would continue to govern the program whether or not a bill passes. Passage would affirm the credit union’s existing approach rather than require it to change course.
Where it Goes From Here
As the industry matures, the definition of a banking partner is widening beyond the deposit account. BHFCU already offers ACH origination and cashless ATM options to its cannabis members, part of a broader shift away from the all-cash model that has made dispensaries targets and complicated compliance throughout the industry. Reducing the cash held at a cannabis business is also a public-safety measure, and one of the central arguments banking-reform advocates have made for years.
The credit union is also building outward through vetted partnerships, connecting members to compliance-checked vendors for services such as payroll and insurance so that operators can avoid providers that may later decline to work with cannabis businesses.
“Our members know they are working with a reputable company that supports cannabis,” Trapp said, “and do not have to stress about issues down the road.” The credit union expects that network of options to keep expanding as the industry grows.
This part of cannabis banking draws less attention than a federal rescheduling order. Cannabis’s federal status will continue to change gradually, and each development tends to raise expectations that the underlying banking rules have not yet met. In the meantime, cannabis businesses still need to deposit revenue, access credit, and pay employees. Black Hills Federal Credit Union’s cannabis banking program is built around the industry’s current conditions rather than a future federal framework that has not yet arrived.
Sponsored Content Disclosure: This article was published as part of a paid commercial arrangement with Black Hills Federal Credit Union. It is not independent editorial content. Statements regarding BHFCU’s cannabis banking program, account services, lending, fees, compliance practices, eligibility, and interpretation of federal or state banking requirements reflect information provided by the sponsor unless otherwise noted. Banking products and services are subject to eligibility, underwriting, jurisdictional requirements, and change. This article does not constitute legal, financial, or compliance advice.
