It is no secret that the last few years have seen big strides made in the legalization of cannabis and the growth of a new industry. In 2020, legal cannabis broke new ground in many ways—New Jersey, Montana, Arizona, and South Dakota voted to legalize the recreational use of cannabis while Mississippi voted to legalize medicinal marijuana.
Despite this progress and the maturing of the industry, banking will continue to be a challenge as cannabis companies within the U.S. cannot access traditional banking services and largely have to operate in cash.
Because financial institutions fear federal legal penalties that could include loss of their FDIC insurance, only a 
few hundred banks nationwide actively operate cannabis accounts. Most are small credit unions with capitalizations in the tens of millions, and most won’t take more than 30 percent of their deposits from companies in a single industry (as is standard among financial services providers). This means that while some banking options exist for cannabis companies, capacity is severely limited.
Additionally, most banks charge cannabis accounts thousands of dollars per month in fees to offset the increased compliance burden, putting financial services out of reach for smaller cannabis companies.
Limited access to financial services drives some cannabis companies to do business entirely in cash. Operating in an all-cash environment makes accurate record-keeping a challenge. A recent audit of the Nevada Department of Taxation’s Marijuana Regulation and Enforcement program found that the state missed out on hundreds of thousands of dollars in tax revenues due to inaccurate record-keeping by cannabis businesses. Cannabis companies that file inaccurate returns must pay late fees and other penalties, adding to the already considerable costs of operating without bank access.
The floodgate moment we’re waiting for in the industry, is for the U.S. to have access to public markets. The removal of these banking barriers that have kept the U.S. cannabis market at bay may soon be addressed by the Secure and Fair Enforcement (SAFE) Banking Act, which is currently awaiting approval from Congress.
The SAFE Banking Act is filled with hopeful possibilities. The global cannabis market needs access to institutional capital, and our post-COVID economy needs the stimulus offered by the legal cannabis industry. The SAFE Banking Act will protect financial institutions from prosecution, loss of insurance, and undocumented pressure from regulators to terminate relationships with legitimate cannabis-related businesses and related individuals. However, we are not there yet, as it currently awaits approval from Congress.
However, we do have a solution available to the industry now!
Our team has experience assisting clients who have an incredible amount of cash in safes—causing excessive stress. But that doesn't have to be the case for owners of cannabis businesses anymore. The bank we work with is under the radar, and is accessible for cannabis businesses. To get started the process will look like this:
What Can I Expect For My Business?Once onboarded, we can work on real estate loans. Unlike the present lenders in the industry, the bank is treating the cannabis industry as conventional commercial lending which is reflected in the attractive deal term synopsis below.
Take the first step to secure your money today! Please contact us to see if these exciting banking and lending options are available in your state and let us help you get access to safe, compliant, and reasonable banking options so you can alleviate the stresses around banking and focus on making your cannabis business successful.
