So called ancillary companies 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.
Which B2B ancillary companies are impacted by cannabis banking service issues?
Any company that does not touch the cannabis plant but provides professional services to those who do may have issues accessing stable banking. As a result, those whose apparent business or profession are not obviously cannabis-related have often opted not to disclose their involvement with THC licensees and are hoping to avoid detection by the bank, depending upon the extent of their public profile in the industry. However, even in these instances, banks under pressure from regulators are taking advantage of ever more rigorous software and detection tools now available to more effectively detect and identify this unwanted activity.
Some of the service industries impacted by this include:
- Accounting & Tax services
- Advocacy & Campaigns
- Attorneys & Legal Services
- Banking & Payment Solutions
- Business & Capital Advisory
- Data & Reporting Services
- Directories and Information Services
- Education Services
- Finance, Leasing and Asset Management
- Hedge funds & Private Equity
- Insurance & Risk Management
- Internal & External Security
- Investment Advisory
- Landlords & Real Estate Brokers
- Licensing, Regulatory and Compliance
- Marketing, Advertising & Branding
- Medical & Health Practitioners
- Payroll Services
- Personnel & Human Resources
- Plumbers, Electricians & General Contractors
- Printing & Publishing
- Public Relations
- Test Labs
- Trade Associations
- Trade Media
- Trade Shows and Conferences
- Venture Capital and Angel Investors
- Websites & Social media
How FINCANN can help
Let’s use an example of a multi-state hydroponics retailer, one of our clients who came to us after exhausting their options to obtain sustainable, compliant banking. Although they were enjoying substantial success in their overall business, they avoided advertising about their affiliation with the cannabis industry, for fear their bank would find out. 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 these issues by introducing them to friendly, compliant bankers that welcomed and partnered with them, eliminating the stress of waiting for the next shoe to drop, as well as releasing the previous marketing restraints so they could publically and transparently engage their business customers via trade shows, in-store promos, educational events and advertising at multiple touch points.
The best practice to assure a stable banking relationship in any event would be 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, especially 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.
Via its exclusive Cannabis Banking Financial Network™, Fincann provides 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. Contact Fincann to set up an appointment.
Once your compliant bank account is open, Fincann provides 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.