Sometimes the risks of Cannabis Banking are the main focus of the industry, however as the cannabis industry continues to grow and become more mainstream, there are incredible opportunities for banks and credit unions looking to bank cannabis businesses.
The ACB team stands ready to help with education, advisory, and research insights.
Here are some of the most common bank and credit union opportunities that make cannabis banking so attractive:
1. Deposits
Cannabis businesses generate a lot of cash, and they need a safe and secure place to deposit it. Banks and credit unions can offer deposit services to cannabis businesses, charging fees for account maintenance, cash handling, and other services.
2. Loans
Cannabis businesses often have difficulty securing financing, as many traditional lenders are hesitant to work with them due to the legal and regulatory risks associated with the industry. Banks and credit unions can offer loans to cannabis businesses, charging interest rates and fees for the service.
3. Merchant services
Cannabis businesses need a way to accept credit and debit card payments, and many traditional payment processors do not work with the industry. Banks and credit unions can offer merchant services to cannabis businesses, charging transaction fees for each sale.
4. Investment banking
As the cannabis industry matures, there will likely be a growing demand for investment banking services, including capital raises, mergers and acquisitions, and initial public offerings (IPOs). Banks and credit unions can offer these services to cannabis businesses, charging fees based on the size and complexity of the deal.
Of course, it’s worth noting that there are also significant legal and regulatory risks associated with banking cannabis businesses, as the drug remains illegal under federal law in the United States. Banks and credit unions looking to enter the space should work closely with legal counsel and their compliance teams to ensure they have robust compliance programs in place and are staying current with education to manage these risks.