Financial Inclusion: Banking in the Legal Cannabis Industry
The panel focused on the challenges of cannabis banking, including availability, compliance issues and whether the proposed Safe Banking Act will pass. The major problem that large banks face is not with the illegality of cannabis, but with the compliance costs. Large banks must file a Suspicious Activity Report (SAR) with each deposit from cannabis companies since they are considered high risk deposits, leading to significant increases in administrative cost. State-chartered banks are mostly regulated by state, but still must comply with federal law. While the Safe Banking Act, introduced last year, is a step in the right direction, it does not address the SAR compliance issue, so banks will still be reluctant.
Emerging Focusses in Cannabis Law: Fintech and Cannabis – An Evolving Industry Within an Evolving Industry
This discussion focused on the intersection between Fintech and the cannabis industry, which are both highly regulated and complicated. Major credit card companies do not permit cards to be used for transaction purposes, so cannabis companies must rely on cash, which is inconvenient for the consumer and a burden for the retailer. Fintech has stepped in to fill the void by helping to facilitate the transactions and provide compliance related services. The payment related companies provide processing and online ordering services, allowing customers to pay using apps to withdrawal directly. They also track spending, which helps tailor products and services to consumers.