Cannabis banking can be a catalyst for credit union growth

Five prudent steps to take if your organization wants to set up a program

Over the past several months it’s been hard to ignore the seemingly constant stream of news regarding states enacting new or updated legal cannabis programs. A notable example is March 31, 2021, when the state of New York became the 15th state to legalize recreational marijuana—creating one of the largest markets in the country. To put that into perspective, the NY marijuana industry is projected to become a $2.5 billion a year industry by 2026.

While this new legislation is expected to bring approximately $350 million a year in tax revenue to the Empire State, it highlights an issue not uncommon to states with medical-turned-recreational cannabis programs. That issue is: What do you do with all that cash?

The reality is that the majority of the legal cannabis industry remains unbanked or underbanked. And while a medical marijuana dispensary may have been able to get by without access to the financial system, the exponential growth that comes from recreational sales is difficult to manage without even the most basic banking products. This is where credit unions come in.

 

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