Although the cannabis industry is experiencing unprecedented growth, there still are obstacles preventing the it from reaching its true economic potential. One of the largest issues weighing on the cannabis industry is banking. Cannabis businesses cannot work with banks, meaning they typically cannot accept credit cards and are forced to house cash and marijuana under the same roof. This can make dispensaries or grow operations a lucrative target for criminals.
However, recent developments indicate solutions may be in sight. According to Credit Union Times, the federal agents tasked with overseeing financial institutions will not be penalizing credit unions working with cannabis businesses operating within state compliance.
The National Credit Union Administration’s chairman, Rodney Hood, said that credit unions taking the necessary precautions to ensure cannabis companies are not violating federal financial regulations will not face punishment from the agency.
“It’s a business decision for the credit unions if they want to take the deposits,” Hood told the Credit Union Times. “We don’t get involved with micro-managing credit unions,” he added.
Despite the statement from Hood, credit unions are not necessarily shielded from action on the part of the Department of Justice. However, the statement could be signaling an upcoming policy shift as it relates to cannabis banking.
The news comes several weeks after a hearing was held by the Senate Banking Committee on The SAFE Act, a bill that would allow banks to do business with cannabis companies.
While momentum could be building for new federal regulations, some states also have plans to offer financial services to the cannabis industry. Nevada officials are considering a workaround that would allow cannabis businesses to deposit cash.
In true Nevada fashion, the system would utilize chips, similar to a casino. Businesses would exchange cash for chips from financial providers.
“What we’re creating is an electronic token-based system that will exist within Nevada that will allow cash to become tokens within the system and then those tokens can transmit around between dispensary and production facility, production facility and cultivation, cultivation and, say, a plumber, and then back to the state for redemption as cash,” Nevada State Treasurer Zach Conine told KNPR
The plan is set to be fully implemented by next summer, but a pilot program could be operational much sooner. It may not be a perfect solution, as Conine admits, but it could function as a stopgap until federal regulators implement a full fix.
“The end game here is we need a federal solution, but until they act on either the Safe Banking Act, which is still stuck in the Senate, or something else, Nevada needs to step in and protect its citizens,” Conine said.
