Cannabis Banking Takes Another L in 2022

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Why the cannabis business is still cash and carry.

Stop at your bank before hitting up a dispensary, unless you want to be stuck with ATM fees.Because of federal prohibition, cannabis-related businesses are banned from financial services, putting banks serving those businesses at risk for federal drug charges. Although some smaller banks and credit unions will take on the risk for high fees, the majority of dispensary purchases are still done in cash.

When Safe Harbor started, almost every cannabis business struggled with cash handling and logistics. Owners worked hard to create effective workarounds, but the immense burden of dealing in cash was a liability in terms of safety and fraud. Then intrepid, future-focused financial institutions began compliantly banking operators who had been in desperate need of a safe, reliable place to store their money.

Reform must be addressed at a different level, really. The attempt to piecemeal federal reform is not going to necessarily be in favor of the industry. The bigger consideration, as it pertains to financial matters, centers more around access to capital and, even bigger, access to the public capital markets. Excluding cannabis businesses from access hinders the American market from competing on a global scale while other countries continue to move forward.

 

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Cash makes no enemies.

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