Banking in the Cannabis Industry
An Ongoing Discussion
May 22, 2014
It was thought that with the Valentines Day Guidance from the Treasury and Department of Justice would allow banks to relax their tough stance against banking with the legal cannabis industry but three months on there is no movement. Except for rumors—
“Visa and MC aren’t going change their rules but they aren’t going to enforce them.”
“Some credit unions are already doing business with growers and dispensaries.”
“Washington is going to start a State-run bank.” —the landscape is silent.
So it remains, the banking industry is all but closed to the legal cannabis industry. Credit card companies are still refusing to process legal cannabis transactions and dispensaries are left with no banking and no choice but to continue to run all-cash businesses. This situation leaves dispensaries and the people working for and visiting them vulnerable to crime. It makes it difficult to pay employees, taxes, and bills and challenging to track internal errors and theft. The Guidance issued by the Financial Crimes Enforcement Network seems to have done little to alleviate banking and credit card companies’ concern that they will be pursued by federal investigators and prosecutors for doing business with entities that are legal at the state level but nonetheless illegal at the federal level.
The fact is financial institutions have come up against intense pressure from federal authorities. Dealing with cannabis businesses opens banks up to accusations of money laundering and requires them to make subjective decisions about reporting (“Does that cash smell like pot to you?! Are they a legal grower? How do we know for sure?”) that imperil them so they avoid it altogether. Attempts by legal cannabis business owners to bank stealthily have worked for some but carry their own set of risks such as being reported to federal regulators and simply being barred from banking for any reason at a bank that suspects you are depositing “marijuana money” in their institution.
So what do you do?
SingleSeed is committed to helping legal cannabis outlets implement cashless payment solutions. We have relationships that allow us to customize solutions for your unique businesses needs. We want you to have the best systems in place: systems that provide value and address your individual wants and needs. The people of SingleSeed will always work to keep you informed, be in discussion with you, listen to you, and provide you with the best products and services available.
To learn more contact us at 1-855-711-2009 or email info@SingleSeed.com