Anyone who is in, or researching the cannabiz, knows that having a big pile of cash on hand at all times is a big problem. This is due to most state regulations prohibiting banks to do business with dispensaries, growers, research labs, etc. There is also the problem of payment processing. Both these issues leave cannabis businesses (especially cash cow dispensaries) with a huge vulnerability and overall pain: a big bag of cash behind the counter. Besides the implied security risks, these rules also promote a sense of marijuana still being contraband, even though the “people” have spoken and declared it legal.
Banks and payment processors are not stupid, they know the huge money and potential they have if they allow cannabis business the right to service. The problem seems to be the federal implications, and who knows when the issue will be changed on that stage. So in the recent years, there has been a big game of political chicken, each state watching the other; until now.
Oregon seems to be the first batter up to tackle this issue, and potentially make it much easier on marijuana businesses to obtain save funding, banking, and perhaps even payment processing. House bill 4094 has been introduced, and if passed, looks very good for venture cannabists. On the Oregon State Legislature website, house bill 4094 states that financial institutions are exempt from penalty for providing financial services to cannabis-related companies. The next part is what really excited me:
“Provision of depository and related financial services to businesses that engage in production, processing or sale of marijuana and marijuana derived products.”
The Oregon bill also declared the situation an emergency. Kudos to them for being the first to address the elephant in the room, hopefully other states will follow and start coming up with banking solutions to make the industry safer. This also means the cannabis industry is getting a micro-step closer to big money recognition, and more than ever, the pendulum is swinging toward national cannabis legalization.
I still think we are years away from a complete federal turn around, but this is actually good news. It means the little guys still have an upper hand before the big money hedge funds and venture capital feel comfortable touching cannabis business. In a way its perfect, we know its coming, but we have time to position our businesses in the right way to either establish brands that will last, or get bought out and sit on the beach, I mean, one could hope right. One thing is for sure; there are plenty on the sidelines just waiting to dip their paws in the pot pool.
Click Here To read Oregon House Bill 4094 B