It's been well over two decades since cannabis began its move toward legalization, starting in just a few states for medical uses. And yet the banking industry has largely passed on widely adopted opportunities to provide credit, accounts and other services to dispensaries and related small and medium-sized businesses (SMB) connected to cannabis.
Financial institutions are limited by patchy interstate and federal legality. Many FIs, with their broad customer base in mind, wonder if this growing market for health and adult-use brands aligns with their ethos. Others contemplate whether a financial institution, as an intermediary, should even make that determination, but they may calculate higher risk, nonetheless.
More banks and credit unions may be due for a fresh look at cannabis, a void to be filled by neobanks, fintech challengers or private funding alternatives. The thought leaders we talked to, many who have been tracking this market since its early days, stress projections for cannabis market growth, state ballot expansion and revitalization of frequently stalled federal regulation that could bring clarity for the U.S. banking system on this issue.
Delene Gilbert, vice president and director of cannabis banking for Oklahoma-based Prism Bank, has already seen the upside benefits of this niche SMB sector. Gilbert says she wants a space where cannabis-related businesses (CRBs) feel "informed, supported and empowered to engage with a bank that understands" their specific challenges, from capital needs to payment processing.
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