The legal cannabis industry continues to grow despite hurdles at the federal level. Banking for the cannabis industry, in particular, has been a challenge for many dispensaries, cultivators, and testing labs. Much of this difficulty stems from the 2013 Cole Memo and FinCEN’s 2014 statement to banks regarding compliance with federal law and suspicious activity reports. Ultimately, the solution is for marijuana to be removed as a Schedule 1 drug at the federal level, but in the interim here are some tips for cannabis entrepreneurs to find the banking services they need.
Support the SAFE Banking Act of 2017
This legislation, introduced by Senator Catherine Cortez Masto (D-Nev) and US Rep Dina Titus (D-Nev), would prohibit federal regulators from levying penalties or fines against banks that handle deposits from legal marijuana businesses. Support this legislation by contacting your representatives in Washington DC.
Work with Local Banks and Credit Unions
Small community banks and credit unions seem to be more willing to work with the cannabis industry than larger banks that already have significant deposits. While local banks are not exempt from FinCEN regulations, they are likely to have the resources and motivation to ensure compliance. In turn, the marijuana industry must commit to transparency with those banks willing to provide services.
Be Aware of New Developments
The issue of payment processing in the cannabis industry is seeing many solutions provided by entrepreneurial upstarts. These upstarts are offering payment process services for both consumers looking to purchase marijuana and the business that sell those products. These companies include:
Although banking for the cannabis industry will continue to be a challenge in the short-term, there are solutions pending at the state and federal level. In the next few years, we expect the issue of banking and payment processing to become less burdensome for the marijuana industry.