Problems with traditional banks have long plagued the marijuana industry. As a result, dispensaries have had to find creative ways to store and manage their cash flow. So, where do dispensaries keep their money?
Dispensaries have several banking options, though these often come with limitations. Unbanked dispensaries have no formal relationship with a financial institution and must manage all of their finances in cash. This can be dangerous, as large sums of money are attractive targets for criminals.
Underbanked dispensaries have a relationship with a financial institution, but their accounts are generally limited to deposits and withdrawals. This can make it difficult to manage day-to-day operations, as most banks do not allow businesses to make electronic payments with their accounts.
However, there are some ways that dispensaries can manage their money safely and effectively, even without a traditional bank account.
The Problem With Traditional Banks
The biggest problem dispensaries face with traditional banks is that marijuana is still illegal under federal law. Banks are not required to service businesses that sell or distribute marijuana. As a result, most banks choose not to do business with dispensaries.
This can create many problems for dispensaries, including:
- Difficulty opening and maintaining a bank account
- Issues with processing payments
- Problems finding loans or lines of credit
All these problems can make it challenging for dispensaries to manage their finances safely and effectively.
Understanding Dispensary Cash Flow Management
Dispensaries must clearly understand their cash flow to manage it effectively. Cash flow is critical to any business, but it is significant for dispensaries because of their unique challenges with banking.
While many of the same cash management principles apply to dispensaries as to other businesses, there are some specific considerations that dispensary owners should consider.
Some best practices for managing cash flow at a dispensary include:
- Maintaining accurate records. This is critical for tax purposes and understanding where your money is going. Be sure to track all income and expenses to make informed decisions about where to allocate your resources.
- Partnering with a financial services company for cash pickups. Doing so can ensure that money is moved quickly and safely. Bespoke Financial works with PayQwick to provide this service for dispensaries.
- Preventing internal theft. You can prevent internal theft by investing in employee training and creating standard operating procedures (SOPs) for the dispensary.
- Educating customers about cash transaction requirements. Keeping your customers informed ensures that transactions are conducted smoothly and efficiently.
- Exploring cannabis payment software. You can reduce the amount of cash coming into the dispensary by using software that allows customers to pay with credit or debit cards.
- Receiving periodic financial statements. Regularly reviewing your dispensary’s financial statements helps you identify potential problems and take corrective action.
Improving Cash Management for Dispensaries
Cash flow can make or break a dispensary. Following the tips above, you can better manage your dispensary’s cash flow and keep your business running smoothly.
Bespoke Financial is the leading provider of financial services for the cannabis industry. We offer a full suite of financial solutions to help dispensaries navigate the unique challenges of the cannabis industry.
When you need access to capital, our team of experts can help you secure the funding you need. We offer financing options, including lines of credit, inventory, and invoice financing. Contact us to learn more about improving your bottom line with additional funds.