Perhaps one of the biggest handicaps the burgeoning cannabis industry faces is finding a viable solution to store and transfer their funds. Traditionally, marijuana businesses tend to run on cash because banks are, for the most part, hesitant to deal with companies whose product is still deemed illegal by the federal government.
Nonetheless, as more and more states continue to legalize recreation cannabis (California, for example, is set to do so on January 1), viable banking options for the industry has become more of a pressing issue.
But what most don’t realize, however, is the industry’s banking issues may not be as dire as we once previously thought.
A Shifting View
While most national banks still remain reluctant to embrace the ‘Green Rush’, several weed-legal states have been able to successfully open bank accounts. According to the U.S. Treasury, there are now almost 400 banks and credit unions that service pot businesses— about triple the amount in 2014.
“We’re definitely seeing more businesses in the industry getting banked every day,” said Aaron Smith, executive director of the National Cannabis Industry Association.
Since 2014, the U.S. Treasury has allowed for banks and credit unions to service cannabis businesses, so long as the pot-centric accounts are closely monitored to be in compliance with the Justice Department’s set of guidelines.
While big-name, national banks remain hesitant to do business with the industry, state-level institutions have been more than willing to embrace the growing demand for legal cannabis.
One way they are doing this is through intense monitoring and regulation of cannabis companies.
Take Washington, for example, which has helped bank and credit unions closely monitor cannabis businesses by collecting, interpreting and publishing data regarding monthly sales, as well as potential legal violations. This has helped banks feel more at ease when dealing with marijuana-related clients.
Essentially, as long as businesses are keeping close track of their sales, and of course, obeying the law, banks are becoming increasingly willing to do business.
However, there are also some weed-legal states that haven’t embraced the banking system yet but have managed to find ways to distribute and transfer funds.
Hawaii, which legalized medical marijuana dispensaries back in 2015, has utilized a PayPal-esque “cashless” system to move around money.
Basically, Hawaii regulators have allowed a Colorado-based credit union to serve the state’s medical marijuana dispensaries. However, there is a third-party app involved called CanPay, which allows MMJ patients to transfer money from their own bank accounts directly into the dispensary’s without a hitch.
“This new cashless system enables the state to focus on patient, public and product safety while we allow commerce to take place. This solution makes sense,” Hawaii Governor David Ige said in a statement.
Final Hit: Is It Getting Easier For Pot Companies To Open Bank Accounts?
While it is getting easier for pot companies to open bank accounts in 2017, there are still a few potential roadblocks in the way.
Undoubtedly the biggest is the Trump administration’s primordial view of cannabis.
Although cannabis has been legalized in several states both recreationally and medicinally, the federal government still views pot as a Schedule I narcotic. While the Obama administration opened things up for states to conduct business like traditional companies, Attorney General Jeff Sessions is looking to do just the opposite.
“We’re looking at that very hard right now, we had a meeting yesterday and talked about it at some length,” Sessions said at a press conference last week. “It’s my view that the use of marijuana is detrimental, and we should not give encouragement in any way to it, and it represents a federal violation, which is in the law and is subject to being enforced.”
However, despite some of Session’s best efforts, he hasn’t been able to upend the progress the country has made when it comes to cannabis acceptance. And if proven models like Washington’s data sharing method and Hawaii’s cashless system begin garnering steam, don’t be surprised to see more marijuana states adopt similar techniques in the near future.