Canabanking: Cultivating a Culture of Compliance through Strategic Alliances

Sherri Scott, CAMS-FCI

The fastest growing industry in the country is also the largest underbanked population; the two ingredients combined are a recipe for disaster. According to The Huffington Post, legal marijuana is the fastest-growing industry in the United States (Ferner, 2015). Due to our existing state of affairs, De-Risking has evolved into financial exclusion. Roughly 60 percent of marijuana related and ancillary businesses remain unbanked (Olson, 2015). Consider the view point of your nemesis; if I were a drug lord running an illegal marijuana operation and wanted to hedge my risk, I’d position myself to profit from the legalized business.

The potential for criminal enterprises to work themselves into the infrastructure becomes increasingly realistic if the legal cannabis industry continues to remain widely underbanked. Lack of communication amongst a state’s marijuana regulatory body, the federal bank or credit union regulator, and federal agents remains a major obstacle. Failure to implement viable long-term solutions with strict controls in this evolving industry will impede the ability to effectively detect crime and hinder future investigations.

If you think marijuana banking doesn’t apply to your financial institution because marijuana related business accounts are not accepted, guess again. Although your financial institution may not currently provide banking services to cannabis dispensaries and cultivation centers, you may not realize you are banking customers who purchase the product, employees who work for the facilities, and countless vendors. If you ever thought of providing legal banking services to a cannabis industry company or you just want to decrease your risk of being abused by one, you need to prepare yourself.

Current issues demand a deep dive approach. Taking the time to build a strong strategic alliance now will help guide policy decisions and provide valuable financial intelligence to assist law enforcement. The War on Drugs is nowhere near an end and together we have the ability to build our arsenal. The secret weapon is cooperation.

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