Ancillary companies often find that financial institutions across the U.S. have been nearly universally unwilling to knowingly provide bank accounts or financial services to them. Even if these companies are engaged tangentially or even secondarily involved in the legal cannabis industry, financial institutions may drop them because of the perceived risk or general undesirability. Among the many businesses affected include:
- Manufacturers and distributors of smoking accessories such as vapes, glassware and other non-plant-derived merchandise
- Automobile and truck dealers
- Capital equipment manufacturers and distributors
- Producers of greenhouses, lighting, irrigation and cultivation systems, soil, nutrients and hydroponics
- Trade show exhibits
Fincann at work: How transparent banking helps B2B ancillary businesses
Take one of our clients, a multi-state hydroponics retailer, for example. This retailer, tired of being disinvited to bank with one institution after another, sought our assistance in establishing sustainable compliant banking. They felt constrained in their advertising, website and in-store promotions as well, avoiding mentioning cannabis to avoid being flagged by their bank or merchant processor. Plus on numerous occasions, they felt obliged to decline large cash orders from business customers to avoid any red flags with their bank.
Fincann resolved all these issues by introducing the client to friendly, compliant bankers that welcomed their business and partnered with them, eliminating the stress of waiting for the next shoe to drop. The move also released them of previous marketing restraints so they could publicly and transparently engage their business customers via trade shows, in-store promos, educational events and advertising at multiple touchpoints.
The best practice to assure a stable banking relationship is to at least direct all revenue from licensed marijuana-related businesses (MRBs) into a compliant, transparent bank account. If preferred, the balance of your business could compliantly remain with your current financial institution.
Given the currently limited bandwidth of cannabis-friendly financial institutions -- and the likelihood that full disclosure may result in account closings -- limited transparency and risk mitigation may be the most practical short-term strategy for some businesses and professions. However, if your licensed clients wish to pay for goods and services with cash, and particularly large sums of cash, the “red flags” raised at your bank may mandate moving at least that portion of your business to one of our compliant, cannabis-friendly institutions.
How Fincann provides cannabis banking solutions for B2B ancillary companies
Via the exclusive Cannabis Banking Financial Network™, Fincann can provide expert guidance and access to transparent, compliant, sustainable banking and merchant processing services for cannabis ancillaries selling to THC licensees in 30 states plus D.C. across the U.S.:
If your state is not listed here, we may still be able to help you by connecting your business with the institutions in our network open to working with out-of-state businesses.
Once your compliant bank account is open, Fincann can provide a variety of compliant, cash-free electronic payment solutions for both B2B and B2C transactions, including:
- Merchant processing via MasterCard, Visa, American Express and Discover
- B2B electronic wallet programs
- B2B e-check apps
- Peer-to-peer bank transfers
Call Fincann today at (212) 724-7777 for more information.