Compliance Made Simple™

Insights - Our Blog

 

The Future of Cannabis Banking


In a quick TV interview, California Cannabis Awards’ Accountant of the Year Sonia Luna offered insights on cannabis companies’ unique banking challenges, such as inadequate access. Her discussion also included:

 

  • The effect of cash transactions on taxes, 
  • Cryptocurrency
  • Long-term solutions to help cannabis companies
Limited access to banking
Government banking watchdog FinCen stated in its “Marijuana Banking Update” report during the second quarter of 2018 that less than 600 out of an approximately 12,000 U.S. registered banking institutions, which includes credit unions, are dealing in the cannabis industry right now. This is because marijuana remains a Schedule I drug under the Controlled Substances Act of the Federal Government.
 
Currently, there are only a few firms that provide an alternative to banking, such as eXpo founded by Larry Lipman, and Payqwick., founded by Keith Marks, and Ken Berke.

Other alternatives to banking

 

Several cities, including San Francisco, have considered opening their own banks to help cannabis businesses. However, according to Luna, it's possibly just a short-term solution.

 

Regarding cryptocurrency as an alternative to banking, meanwhile, Luna said that it involves a lot of technology and, at the same time, risks.

 

Long-term solution

 

When it comes to a long-term solution to the cannabis banking problem, Luna stressed that the best strategy would be to remove marijuana as a Schedule I drug.

She also said that interstate banking would help the nation be competitive not just domestically, but also internationally.

This summer, a bipartisan bill sponsored by Elizabeth Warren (D-MA) and Corey Gardner (R-CO) has the best traction to be approved. It has a provision that allows banks to serve the cannabis industry without penalty.

The latest TV interview with both Warren and Gardner clearly demonstrates that there is a great hope for the cannabis industry in Washington D.C.

If you want to learn more about California cannabis laws and cannabis tax strategies and get a free cannabis accounting analysis with Sonia Luna, schedule a consultation with us here.

You may also download our Enterprise Resource Planning selection checklist to help you choose the best cannabis software for your business.