Yesterday’sAMA with Zodaka got me thinking about the maturation of our industry. I feel this is a dark sector of the cannabis industry about which we rarely speak – possibly a byproduct of fear fueled by nearly a century of prohibition, asset seizures, account freezes, etc. So as we establish the cannabis industry worldwide, I want to be able to talk about issues regarding insurance and banking. This conversation is for everyone in our @memberdirectory because we all serve the cannabis industry in one way or another. So, I ask you, who uses banks? What issues or hurdles are you still facing?
Maybe there is someone here to help. Let’s bridge the gap and get the conversation started about banking. Let’s chat about your banking situation.
I just got my cannabis bank account started. So far so good. It took about 150 pages for the application, 2 months for review, and $400/mo. So far so good.
This bank also partnered with an insurance company willing to insure cannabis related assets, such as my greenhouses, and other structures not covered by my current insurance. I haven’t got that one started, but it exists and I intend to look into it.
I have always wonder if the old farm bank laws could be used to our advantage. Every state with agricultural has state cooperative bank rules. These are like the old farm burrow banks. They are a mutail benefit organization, the depositors are the owners.
They are not required to be part of the ACH Federal reserve system. They don’t even have to follow the credit union rules of a host banking institution in most states.
https://www.cunamutual.com is where I would start. They are the credit union of credit unions. I think they would be a source of information on mutual farm associations banking. I have to see if I still have a contact there, I did some work for them in about 2001 or so. I have worked with them on lots of payroll workflow issues with member credit unions.
They do have stick governance rules but vary by state.
I am in Oregon and am using the same credit union as Dan and everyone else here. $400/month per license. We were dropped by two banks previous to joining the credit union a year and half ago. Quarterly compliance packets(financials, METRC reports) must be done, but it is actually not too much of a hassle. The biggest problem is that the nearest branch is an hour away from Portland. Interestingly, we have gone from receiving all cash to now 75% checks/25% cash in span of three years. Not having a bank account would be a great hinderance to building a real business.
I agree! I believe there is intent in the very design of the banking laws in this country to hinder to stifle the growth potential of the legal cannabis industry.
Agreed, but most of the bank regulations are federal. This is why state community bank are going to be our Path until we have federal government acceptance of cannabis.
$400 dollars a month for a bank account.
I know the credit unions have costs, but that is rediculus. If I have say 100k in cash at the bank as an average balance. They are making 2.25 percent on the overnight market. They are making 208 dollars a month on my deposit if they only load it to other banks.
I would ask the credit union for its financials. See where they are making money.
Correct me if I’m wrong but any bank dealing with the cannabis industry must file those suspicious activity reports to the feds for every transaction you make under the 280E laws. That’s a lot of extra work!
We were able to secure local banking for our hemp farm. After Trump signs the new farm bill everyone including banks will be jumping in to the soon to be 100% federally legal form a marijuana.
I think the Farm Bill will represent a massive tidal shift in the federal approach to cannabis. Definitely a HUUUGE step in the right direction. I agree with you @RedDirtRx, the banks will surely follow the money with federal acceptance of hemp.
It used to be every single transaction and it cost $1000/mo. They are down to quarterly reports and $400/mo. Even FINCEN doesn’t want the cost of that level of reporting.
I believe that cannabis money cannot be invested for profit at this point. The cannabis department of our bank is self funded through fees and that is $400/mo for site visits, reporting, and other compliance efforts. It was $500/mo last year, and $1000/mo when they started for medical back in 2014. At least, if memory serves correct, this is what I was told.
I hate to keep going to Captive Insurance but this conversation is leading exactly to what’s gotten everyone so excited about it!!! Cannabis money can not be invested for profit! So if one were to take the Cannabis money and purchase insurance premiums from an Insurance company they owned (this is what a captive is) then they get that premium back if no claim is made and now the Cannabis money is surplus from an insurance company and can be taxed as capital gains or left in the Captive to accumulate with future years and invest in other ways. This is just ONE of the benefits, aside from the insurance that it offers. As soon as Cannabis is declassified from a Schedule One, which I think will be sooner rather than later, the premiums will also function as a tax savings in the form of a write off.
Thanks to a Federal legalization. banking and insurance are not a problem in Canada. My insurance Co. is currently coming up with a crop insurance policy. I am sorry to here about the issues that my US colleagues face.
That’s a great sign! I once worked for a hydroponics company and had some issues when I was trying to refinance a home. We had ZERO involvement with the cannabis industry but I still had to write an LOE for the underwriter so she would clear my loan! It sounds like you have found a good and tolerant bank.
Late yesterday the House of Representatives passed the Farm Bill that contains the hemp legalization language! There really are no words to express what a milestone this is for the hemp industry.
Once this bill is signed by the President, hemp is officially no longer a Schedule 1 substance and a whole new world begins. So many things are now possible including; legal banking, full commercialization without research requirements, crop insurance, all kinds of federal grants, and transportation across state lines.
Is it perfect? No. Is our work done? No. But we all should rejoice in this momentous progress and all the potential that this federal framework gives us. Now it is up to us to build the industry and fulfill all the promise for a better future we all know hemp can provide.
NHA is committed to furthering progress using our seat at the table with elected officials and all the federal agencies that have jurisdiction over hemp.
We are proud of the work we have done to help get us to this point and we are proud of all of you who have made your voice heard and supported our mission.
So let’s take a moment to celebrate and then let’s roll up our sleeves and get back to work!
When the tide shifted a few years back and Colorado and Washington became rec legal i told everyone I can’t wait until it hits here in AK so i can stop dealing with stacks of 20’s, well Its legal and Im still dealing with stacks of 20’s, paying workers with stacks of 20’s, buying supplies with stacks of 20’s, paying utilities and rent with stacks of 20’s and generally just carrying around stacks of 20’s all damn day. Only now its a larger scale so im dealing with more stacks of 20’s than ever before.
