One of the biggest challenges facing the legal cannabis industry is a lack of access to banks and credit companies. These challenges arise because financial institutions typically do not want to work with marijuana companies since weed is still illegal at the federal level. But in Massachusetts, as the state prepares to launch recreational retail sales, some of these challenges might be avoided. That’s because a state-chartered credit union has decided to offer a line of financial services to cannabis businesses in the state.
GFA Federal Credit Union Decides to Serve Cannabis Industry
GFA Federal Credit Union is a relatively small financial institution based in Gardner, Massachusetts. It currently holds a little more than $500 million in assets.
And while that places it on the smaller side of things when compared to larger national financial companies, GFA has now committed to pioneering new terrain that larger institutions are generally not willing to explore: the legal cannabis space.
GFA recently announced its intentions to offer financial services to recreational cannabis businesses in Massachusetts. The company made its decision after at least one year of careful research and planning.
Now, GFA said it is committed to working with marijuana businesses as soon as Massachusetts begins recreational retail sales.
In particular, GFA will provide cannabis businesses important products and services such as checking accounts, the ability to make and receive wire transfers, payroll management, and bill payment services.
At this point, GFA said it will not offer loans to cannabis businesses. Access to startup capital has long been a hardship for smaller-sized cannabis businesses, and for cannabis entrepreneurs from under-represented communities.
Although GFA will not offer loans this year, representatives from the credit union told local news sources that the credit union may reconsider that policy next year.
A Big Step Forward
The ability to access basic financial services could be a big step forward for weed businesses in Massachusetts. In particular, it could prove hugely beneficial for both customers and businesses.
For starters, it will allow customers to make purchases with credit and debit cards. In most places, cannabis businesses cannot access basic financial services, forcing customers to make all purchases with cash.
Similarly, GFA’s offerings promise to help cannabis businesses in a number of ways. Most immediately, it will enable them to conduct quick, secure, and convenient transactions the way any other business does.
Beyond that, access to standard financial services could go a long way in making regular business operations much more secure. Typically, marijuana businesses in weed-legal states are forced to operate as cash only businesses.
Having thousands of dollars in cash all over the place creates heightened security risks for many weed businesses. This puts employees at greater risk. It also costs businesses a lot of money, as they have to devote significant resources to security concerns.
Access to banks and credit unions will go a long way toward addressing these challenges.
Recreational Weed in Massachusetts
GFA said it will work with a “test group” of 15-20 cannabis companies this year. If things go well, the credit union is likely to expand that number.
GFA plans to begin working with cannabis companies as soon as Massachusetts launches its recreational retail program. Sales were originally slated to begin in July. But after significant delays by state regulators, that deadline came and went.
Now, state officials hope to get the program up and running sometime this fall. And whenever sales begin, GFA is prepared to begin servicing the state’s legal weed industry.