What Banking Issues Do Cannabis Business Face?
The long-term stability of a marijuana-related business (MRBs) is directly proportional to the quality and transparency of its compliance. As the steward of commerce, banking and related financial services are core to maintaining that compliance. However, many marijuana-related businesses find themselves in a predicament where they cannot be truly open with their financial institutions, resulting in strained banking relationships and financial services which could be dropped at any time. On the flipside, the vast majority of financial institutions won’t publicly advertise their willingness to work with an MRB.
Cannabis businesses have always faced significant obstacles obtaining and retaining banking and merchant processing services. However, banking in the cannabis industry is a perceived risk, not an actual or practical one, and that fact makes all the difference. This perceived risk is largely based on misinformation or a deliberate lack of information, as well as the ingrained prejudice against cannabis.
When it comes to cannabis, U.S.-based financial institutions forsake their role in the financial system as essential stewards of commerce. Banks and merchant processors are nearly universally unwilling to open accounts or provide basic banking service to MRBs or the ancillary businesses who provide services to them. While many may fear losing accreditation or FDIC status from the federal government, the reality is that a cash-only business opens up the opportunity for tax evasion and other financial crimes, making it the interest of the federal government for banks to conduct business with MRBs.
For the most part, most MRBs and ancillary services are either forced to operate entirely in cash or seek a covert checking account which could easily be interpreted as fraudulent. Others are forced to rely on cashless ATMs or electronic wallet workarounds under an innocuous guise, such as a flower shop or a consulting company. All of these businesses anticipate account closures and need to go through the exhausting process of opening a new account, forced to find an alternative solution several times a year.
The FINCANN Cannabis Banking Solution
FINCANN’s Cannabis Banking Financial Network™ bypasses the issues presented in cannabis banking by building a consortium of U.S.-based institutions willing to conduct business with MRBs. This exclusive consortium has done the legwork for you, building strong relationships with these banks, merchant processors, payroll processors,
With roughly 25,000 licensed and ancillary enterprises across the United States in need of banking and merchant processing services, FINCANN’s exclusive consortium is growing every day. Begin your application now to open your own compliant, transparent, and sustainable cannabis banking or merchant processing account!
What are the requirements to open an account through FINCANN?
FINCANN is in full compliance with the guidelines of federal and state examiners, as well as the U.S. Departments of Justice and Treasury (FinCen). These guidelines require financial institutions to undertake rigorous and effective measures to assure several important benchmarks for MRBs, including:
- The beneficial owners and principals of the business have clean records
- The business is properly licensed and compliant with all reporting and operational requirements of the licensing authority
- The business is operating in substantial compliance with Cole Memo priorities
- The business engages in effective and reporting and operational protocols and procedures
- The business strictly adheres to said protocols to prevent the co-mingling of any revenue or sale processed from other operations
- For plant-touching businesses, the plant-derived inventory must be fully tracked and accounted for to prevent diversion
Plant-touching and ancillary businesses both face the same requirements, even though ancillary businesses do not touch the plant, nor do they hold a state license.
What to expect when applying for an account through FINCANN
When applying for a compliant bank account, be prepared to undergo a rigorous three-to-four-week process of due diligence and reporting, including a mandatory on-site compliance inspection of all licensed facilities. The process generally requires:
- The initial application
- Advisory and compliance fees
- A minimum advance deposit (refundable)
- Logistics costs to securely move legacy cash (if applicable)
In addition, ongoing account maintenance fees are usually a percentage of deposits, generally ranging from .25% to 2.5%, with a monthly minimum and maximum per account.