Banking and Taxes Questions - Kentucky Medical Cannabis Program

Licensed cannabis businesses in the Commonwealth of Kentucky are responsible for obtaining and maintaining their own commercial bank accounts with their financial institutions. Anyone anticipating seeking a cannabis business license is encouraged to work with their financial institution directly to ensure that banking services will be available. Nationally, credit unions have been more willing to work with cannabis businesses than federal and state-chartered banks.

Anyone seeking a cannabis business license is encouraged to work with their financial institution directly to understand what, if any, additional fees will be charged to their account. Nationally, licensed cannabis businesses that are allowed to bank with a financial institution are typically charged higher fees than other industries.

No. Internal Revenue Code Section 280E provides:
- No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted.