Five Myths Of Cannabis Banking (Sponsored Post)

The Merriam-Webster dictionary defines an urban legend as an often lurid story or anecdote that is based on hearsay and widely circulated as true. To say that a new and emerging industry like the cannabis industry would have a few myths is an understatement.

With that, let’s discuss

Myth 1: Cannabis companies can’t get a bank account

In a study by Whitney Economics, 72 percent of cannabis businesses polled responded that banking was their No. 1 concern—72 percent! That’s ranked ahead of taxes, by the way. Cannabis businesses ranked banking concerns ahead of taxes…

Now, this particular myth is based totally on truth—but from a certain point in time. In the early days of legalized cannabis, the industry was, in fact, “unbanked” and existed completely in cash. It wasn’t that long ago when cannabis companies used to have to pay their taxes in actual stacks of cash.

Today, FinCEN estimates that there are 755 financial institutions providing banking services to the industry. I believe most insiders would agree that the 755 number is way too high; we largely agree that the number is closer to 200, maybe 250ish. But, regardless of whether it’s 700ish or 200ish, the point is there are hundreds of financial institutions working with the cannabis industry today.

It’s worth noting that dividing that total across the country means that in any given state there are only a handful of banks or credit unions banking cannabis businesses.

Myth 2: Cannabis companies can only bank with credit unions

I am honestly not too sure how this particular myth took such heavy roots, but it’s not true. Not anymore anyway.

In the very early days, credit unions were the first to start accepting cannabis deposits, and the NCUA (National Credit Union Administration) has been much more vocally supportive of the cannabis industry. But that dynamic is changing—fast.

If you go by the FinCEN numbers, there are significantly more banks than credit unions in the cannabis space, and if you go by “insider” numbers, it’s more like 60/40 in favor of the number of banks.

The better question here might be: does it matter? In modern-day banking, there is not that much of a difference between a typical bank vs. a typical credit union. For your average business, the difference between the organizational structures of banks and credit unions isn’t nearly as important as what products and services they’re willing to offer.

Myth 3: Cannabis businesses transact in cash only

There are two sides to consider with this myth: B2B and B2C.

Let’s first tackle B2B (Business to Business). As discussed above, there are banking options now. Generally speaking, a cannabis business today that wants a bank account can get one. So, while there was a time when businesses actually had to pay everybody in cash, from vendors to suppliers, that is just not the case anymore. PayQwick powered by Green Check even has an option via our QwickPay functionality for instant settlement B2B.

Business to consumer (B2C), however, is a bit more nuanced. Presumably, you have heard by now that credit cards are NOT available in the space. This is the main driver for the large amounts of cash in the business. Consumers like credit cards, and at the moment that is not an option, hence the heavy cash usage at the retail level. However, there are many great cashless options available, contrary to popular belief. Aside from credit card based/linked transactions, just about every other form of B2C payment option is available. So, why the heavy cash usage if people can go cashless? Consumers like credit cards.

Myth 4: Cannabis businesses can’t get a loan from a traditional bank or credit union

Ok, I accept that this myth is fairly well-founded. Up until perhaps 2 or 3 years ago, there was virtually zero institutional debt available. Almost all the money in the space was private in some way: private equity, family offices, private lenders, etc.

Aside from an actual reticence to lend from banks and credit unions, there is another possible origin for this myth: start-ups. Here’s the thing: For most new license holders, or for that matter, aspiring license holders, what they actually need is start-up capital. Banks and credit unions are not traditionally sources of startup capital.

In select scenarios, there are programs that may be helpful, such as various SBA programs, for example. Unfortunately, those programs are not available in cannabis at the moment. With some hemp-based products, USDA and/or other government programs may be available, but not so much for THC products.

Again, it’s important to note that this particular blocker is not due to the business being a cannabis business but rather a fairly common issue that every startup has to contend with. Unfortunately, it is a harsh reality that if you don’t have enough startup capital for your business, there just simply won’t be a business. The point is, I believe those get lumped into the “can’t get a loan from a traditional bank or credit union” myth.

Today, many of Green Check’s great banks/credit unions are lending to plant-touching businesses and lending on plant-touching properties.

Myth 5: Banks are making bank off banking bud

Look, I’m not going to pretend that financial institutions are losing money on cannabis. Keep in mind, if they did, they probably just wouldn’t do it. But, it’s not nearly as profitable as the myth would suggest.

Consider this: prior to software, like Green Check, being available, banks and credit unions used to talk about this ratio: 5 to 8. That is, for every 5 to 8 cannabis businesses you banked, you had to add another employee to support them. That’s how much work is involved in banking cannabis. Mind you, we are talking about expensive and in-demand talent like BSA analysts/officers.

Today, Green Check has clients managing 50, 60 and upwards of 80 accounts per full-time employee (FTE – FTE hours is how compliance resources are measured). So for cannabis businesses, the early days of paying $10k+ a month just for a checking account are largely gone. Today, financial institutions that are not competitively priced are finding themselves either struggling to gain traction or bleeding accounts/assets to competitors.

We could probably go on and on, but these are the Top Five cannabis banking myths, in my mind. Of course, like a lot of myths and urban legends, they tend to be based on some truths.

Ironically, it is the ascendance of companies like Green Check that turned some of these points from truths into myths. With proven software and proven expertise now available, the adoption and acceptance of cannabis banking by traditional financial institutions has significantly accelerated in the last few years. With more financial institutions in the space wielding better, more efficient processes, that naturally drove down pricing while improving capabilities and capacity.

About the author:

Peter Su is a Senior Vice President with Green Check Verified, the top cannabis banking compliance software/consultancy in the space. A long-time banker, Peter has spent 20+ years in finance. He has personally spearheaded two separate cannabis banking programs and in his current role at Green Check is responsible for the growth of over 120 cannabis banking programs all over the country. A frequent speaker and a sought-after thought leader, he has been featured in and others.

An active member of the cannabis community, he is an advisor for Minority Cannabis Academy. And, he is on the board of the Asian Cannabis Roundtable, serving as treasurer. Additionally, he writes for Rolling Stone Cannabis Culture Council.

Peter has also previously served as an advisory panel board member for Pace University’s Lubin School of Business; on the banking and financial services committee of the National Cannabis Industry Association; Chaired the Banking and Financial Services Committee for the NYCCIA and is a US Army veteran.

Find Peter on LinkedIn at https://www.linkedin.com/in/petersu

Cannabis Is Critical To Trans Health And Self-Care (Sponsored Op-Ed)

“As transitioning brought my full and true self to the world, cannabis helped my true self achieve its full potential.”

This post is sponsored by Weedmaps.

by Blossom C. Brown

Medical cannabis’s critical role in the health and self-care of transgender individuals isn’t talked about as much as it should be. Additionally, credible resources about medical cannabis specifically for the trans community are practically nonexistent.

The need for that information, and access to it, is paramount. The 1.5 million adults in the United States who identify as transgender have unique physical health needs. The community’s mental health needs are also unique and are of major concern: more than 40 percent of trans individuals in the U.S. have attempted suicide (compared to 4.6 percent of the entire US population). And the rates and risk factors of addiction are considerably higher for trans people than those of their lesbian, gay, bisexual and straight peers.

It’s time we acknowledged that legal medical cannabis is important to the trans community.

I am a health educator, advocate and an expert on being a black trans woman who has found physical and mental health-enhancing benefits through medical cannabis use. I was introduced to the plant fairly late in life, by today’s standards at least. I grew up in Mississippi and didn’t know cannabis in my youth.

I was 28 years old and visiting a friend in Washington, D.C. when I tried it for the first time—a college-educated adult and free from any perceived peer pressure with the ability to make informed decisions. It was my choice and it was life-changing.

Cannabis introduced me to a new way of feeling. It relaxed me without inebriating me. It gave me a sense of clarity and focus I had never experienced before. It even improved my professional life, helping me manage stress and imbalance—the result of a grueling travel schedule and daunting public speaking commitments. As transitioning brought my full and true self to the world, cannabis helped my true self achieve its full potential.

This was another new journey for me, and I wanted to do it right, so I educated myself, and, most importantly, I consulted my health care provider. I wanted to make sure I understood how my medical cannabis use could impact and enhance my transition. Since I was traveling often, I also researched how cannabis laws differ from state to state.

I realized that cannabis might help with other ailments associated with being trans, such as anxiety, sleeplessness, gender dysphoria, depression, hormone replacement-related weight gain and postoperative pain, to name just a few. Throughout my transition, I experienced some of these ailments myself. I knew others were suffering, too.

I certainly knew about anxiety. For any woman, just walking down a street can sometimes be an anxiety-inducing experience. It’s worse for a woman of color. Now picture a black trans woman and what she’s dealing with. Sometimes, knowing the kind of day that lies ahead, it’s almost impossible to just get out of bed, let alone walk down a street without fear due to the high rates of violence she faces. For me, cannabis made it possible.

For trans people, the hurdles of everyday life are often much higher, the barriers to basic needs are much wider, and the structural nature of discrimination and exclusion is much deeper. Shouldering that weight every single day results in debilitating stress, anxiety and depression.

Working with a health care provider, accessing trans-inclusive support resources and keeping in mind the setting, dose and strain, cannabis may provide remarkable relief from anxiety and depression, as well as the symptoms of post-traumatic stress disorder.

It may also be beneficial in alleviating the side effects of cross-sex hormone treatment and an effective component of postoperative pain management.

Access to this medicine has serious challenges, which are compounded for trans people. The undersupply of licensed retail in California and other states shoves trans people to the illicit market—not just unlicensed shops, but street dealers who peddle untested counterfeit and sometimes intentionally-tampered products. Restrictions on delivery exacerbate the anxiety of a person it has already rendered housebound. Especially for trans women, with no other option but survivor work, getting arrested with what is essential medicine in some states can mean additional jail time in others.

One of the most amazing aspects of the trans community is resilience. Despite what may seem to be insurmountable obstacles—higher rates of HIV infections; escalating rates of violence against trans people; job and housing discrimination—trans people persevere. Our visibility, activism and engagement is fueling unprecedented progress around the globe. Cannabis has a role in that—helping us get out of bed, calm our daily anxiety, walk down the street and do what we do to change the world. Or at least our corner of it.

Organizations that support the trans community, especially those whose mission includes advancing trans health and wellness, should include medical cannabis information as part of their education and outreach efforts.

And the cannabis industry—in its effort to be as inclusive as possible—must recognize that the trans community is a vital and growing segment of their customer base. Advertising, marketing, product development, customer service and experience, corporate philanthropy and social responsibility should reflect that reality.

Blossom C. Brown works as an actress, producer and activist. Her social justice work focuses on HIV education and improving PrEP access. To learn more about transgender people visit the National Center for Transgender Equality.

This post is sponsored by Weedmaps.

Photo courtesy of Max Pixel.

The Good War: Veterans, Cannabis and the Fight for Legalization

This is a sponsored post by Eric Goepel of Veterans Cannabis Coalition.

My path toward becoming a cannabis advocate started with a quote. “I hate war as only a soldier who has lived it can, only as one who has seen its brutality, its futility, its stupidity.”

Dwight Eisenhower, at the time a five-star general and most recently Supreme Commander of the victorious Allied Expeditionary Forces in Europe during World War II, spoke those words in 1946. The sentiment of the future 34th President of the United States struck at the heart of American society trying to mythologize its role in what was already being called ‘the Good War.’ However the country might feel about being victorious, humanity had lost—60 million people, or roughly 3% of the world’s population in 1940, had been killed. No amount of self-congratulation for being on the winning side of history could erase that. I cannot imagine the scale of death and destruction that Eisenhower experienced, but I ended up inheriting his hatred of war for the same reasons.

I came across that quote during my first deployment to Iraq in 2006. It felt like the right words to capture the reality of what we were doing: fighting both sides of a sectarian conflict that had become a beacon for extremists while trying to prop up a corrupt and untrusted government. That basic fact never seemed to get much traction in the national discussion of the war, though. It was always jarring to return home to yellow ribbons and being thanked for my service, while thinking back on all people we found in mass graves, watched hung from bridges or witnessed ripped to shreds in bombed-out markets. Thank me for what? It rang hollow.

My enlistment in the Army ended in 2011. By the time I left, ten friends and colleagues had been laid to rest while the wars they died in continued without an end in sight. The return to civilian life put into stark contrast just how brutal, futile and stupid our wars were, as I was greeted by a population who had largely forgotten about the decade-plus conflict their government was fighting. With that came the profound realization that all the things we did or failed to do both equally hurt the people we were supposed to help and protect. The overthrow of Saddam Hussein or the Taliban was cold comfort for the thousands of civilians slain month-in month-out, caught in the crossfire between a multi-sided, shifting fight that still continues into its second decade.

Guilt, shame and anger accompanied me for years, but I compartmentalized and worked to build my skills and experience with the hope of finding some greater purpose. During my time in Washington, D.C. working on veterans affairs policy, I became convinced that ending the prohibition of cannabis was the ‘good war’ I had been searching for. I had seen first-hand the immense benefit that many veterans had experienced medicating with cannabis, often after going through years of conventional pharmaceutical treatments with opioids, tranquilizers, stimulants and sedatives that destroyed their quality of life. But because of the long-standing failure of Congress and the White House to address the legal status of medical access to cannabis, veterans were essentially being punished by the government that sent them to war for managing the injuries that same government failed to treat.

Veterans issues are American issues—veterans are a cross-section of the population and deal with many of the same health challenges millions of other Americans face. Post-traumatic stress disorder (PTSD) is often brought up nearly exclusively in the context of veterans—yet research indicates that nearly 10% of all women in the U.S. will have PTSD at some point. Traumatic brain injuries (TBI) are relatively common in many veterans, but as evidenced by chronic traumatic encephalopathy (CTE) in football players, brain trauma exists in other fields. Veterans often deal with chronic pain as a result of various physical traumas sustained in their service, but arthritis, fibromyalgia and back injuries do not discriminate by past wear of a uniform. To all of these conditions, cannabis offers potential medical benefits.

That is why I founded the Veterans Cannabis Coalition—to advocate on behalf of veterans—and all Americans—for equal access, research and an end cannabis to prohibition. In an era of immense political polarization, 9-in-10 Americans are in favor medical cannabis access while 3/5 of the country supports complete legalization. Those numbers are heartening, but in order to convert public support into legislative action there is far more work that needs to be done. We believe that veterans can be the bridge for many of those who are indifferent or hostile to cannabis issues to a perspective grounded in compassion and science. That is why we work with lawmakers and staff on Capitol Hill to support legislation, organize veterans in key states and districts to effectively engage with their elected representatives and build events and media products that help reshape the messaging around cannabis.

We have had some early success this year with the passage of H.R.5520, the VA Medicinal Cannabis Research Act, out of committee on May 8. That date marked the first time any piece of cannabis-related legislation had ever advanced in Congress, and the bill currently awaits a vote in the full House of Representatives. To build on this modest accomplishment, we are looking for support from those who care about all of the intersecting issues that are tied up in a nearly century-long injustice. Healthcare, civil liberties, criminal justice, racial equity, jobs, economic development and scientific research—by helping advance cannabis reform we can advance these issues and collectively strike at the heart of many social ills caused by prohibition. I hope you will join us in our efforts.

Let your members of Congress know that you support cannabis research and expanding options for veterans healthcare. Go to https://p2a.co/vetscannacoal or text VCC to 52886 and take action now.

If you are in the San Francisco Bay area on July 13, please consider attending the Veterans Cannabis Coalition’s first fundraiser, hosted by the Berkeley Patients Group with support from Operation EVAC. Tickets are available here:

Please consider becoming a recurring supporter on Patreon or making a one-time donation on GoFundMe.

Eric Goepel is the founder and CEO of the Veterans Cannabis Coalition. He served in the U.S. Army for seven years, deploying twice to Iraq, and has previously worked as an assistant director at a veterans service organization and a policy staffer in the U.S. Senate.