Tony Repanich, president and chief operating officer of Shield Compliance, joins Tom Bengtson, president of NFR Communications and publisher of BankBeat magazine and BankBeat.biz, for an interview about the challenges and opportunities of banking the cannabis industry.
While legislation legalizing cannabis at the federal level is currently stalled, bankers should understand that it’s really a matter of “when” not “if” there will be broad federal legalization, or at a minimum, recognition of state cannabis laws, Repanich said. Banks considering offering banking services to cannabis businesses don’t need to wait, however, and early adopters of this line of business could see advantages. “There are some inherent risks in banking the cannabis industry that don’t magically go away when you have recognition at the federal level. Banks that take steps now to learn about this market and take on the compliance requirements can get a first movers’ advantage into an industry with a lot less competition.”
The illicit cannabis market currently represents the bulk of industry dollars, but that will change rapidly over the next few years, and banks that get into the business now have the opportunity to be on the frontlines of this rapidly expanding market.
“It’s important to understand that these are legally operating businesses paying a huge amount of taxes, and they deserve access to banking services,” Repanich said. “There’s a direct connection with our mission as bankers, which is to serve the needs of our community. Providing access to banking supports business owners and helps improve public safety while providing an important growth opportunity to the financial institution. This is a chance to do something different and unique.”