Cannabis & Hemp Banking

Photo of cannabis products.The SDBA takes no position on the moral issues raised by legalizing marijuana. But with the passage of Amendment A and Initiated Measure 26 legalizing medical and recreational use of marijuana in South Dakota, the SDBA remains committed to supporting its member banks during this transition. At this time, there are a lot of unknowns as the South Dakota Legislature is required to provide statutory framework and administrative rules must be formalized.

Federal and state laws continue to conflict regarding legality of cannabis use and sale. That also means that it remains illegal at the federal level for banks to serve businesses working directly and indirectly with the cannabis industry. Current proposals in both the U.S. Senate and the House seek to provide greater clarity and bridge the gap between state and federal law provide a solid starting point for discussion. 

The South Dakota Department of Revenue (DOR) will be responsible for licensing and regulating the cultivation, manufacturing, testing, transport, delivery and sale of marijuana in South Dakota. The constitutional amendment is effective July 1, 2021, and DOR has until April 1, 2022, to have regulations in place to begin accepting applications for establishments. DOR does not anticipate accepting marijuana licensing applications prior to sometime in 2022. Visit DOR's website


There are several educational resources available to banks.

  • Cannabis/Hemp Banking 101 Webinar: The SDBA's Cannabis/Hemp Banking 101 Webinar is a virtual opportunity to learn cannabis/hemp banking basics and a chance to ask questions of industry experts. The webinar will be held via Zoom 1-4:30 p.m. CST on Jan. 20 and 10 a.m.-1 p.m. CST on Jan. 21, 2021. Learn more and register
  • OnCourse Learning: The SDBA’s webinar partner, OnCourse Learning, has a variety of on-demand webinars addressing the topic of marijuana. Visit, click on the search option and enter “marijuana”. 
  • American Bankers Association: The ABA provides a wealth of information on its cannabis banking webpage
  • Colorado Bankers Association: Colorado was the first state in the country to legalize recreational cannabis use, and the Colorado Bankers Association has been on the forefront of the issue. Visit the CBA's cannabis webpage.

The SDBA will continue to research this issue and keep you apprised of additional resources. Questions, contact the SDBA at 605.224.1653 or email SDBA President Karlton Adam at [email protected].