The state of cannabis banking in the credit union space

What these businesses need, applicable regulations, the role of technology and possible next steps

With many states legalizing the sale and use of cannabis for medical or recreational purposes, cannabis is a lucrative and growing area of industry. With more states set to change their cannabis laws in the future, credit unions are becoming increasingly interested in learning more about the potential implications of banking cannabis-related businesses. This blog will address how financial services have arrived at their current state.

A Little History

Many first-mover credit unions began supporting local cannabis businesses by securing large amounts of cash on hand. Because marijuana is classified as a Schedule I drug, most credit and debit card companies refuse to work with cannabis-related businesses, leaving most of these companies with an excessive amount of cash in their registers. When financial services companies starting to work with CRBs, cash management was the primary service they offered; however, this strategy is no longer competitive.

Cannabis businesses are now looking for a full suite of products from preferred financial institutions. This includes ACH originations, wires, debit card services and most importantly, lending. Smaller credit unions that have not traditionally offered these types of services are adding cash management services, lest they be neglected by more established cannabis businesses. But a smaller financial institution often cannot advance cannabis services alone–it benefits from partnering with experienced cannabis personnel to develop its program.


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