Banking has never been the simplest process for dispensaries. Because of the complex legal status of cannabis, banks have had to tread carefully with cannabis businesses of any type. Small business owners have faced some particular challenges with getting cannabis business loans or even a place to store their money.
This is largely due to certain federal regulations. In 2014, the Financial Crimes Enforcement Network issued guidelines that made it more complicated for banks to interact with any cannabis business, so many banking institutions have simply stayed out of cannabis lending altogether. As a result, many dispensaries operate largely in cash, which presents its own set of problems.
Dispensaries are already tempting targets for thieves because of the product they keep on hand. Keep large cash reserves on the premises, and a dispensary becomes the clear winner for many potential burglars. These thefts happen frequently enough that many dispensary owners take steps to protect their businesses with guards when they can’t be around.
When Will Banking Become Easier for Dispensaries?
The answer is “soon.” While cannabis businesses still face complications at the federal level, political and financial groups alike are looking to make it easier for the industry to participate in normal banking activities in 2021.
California is at the forefront, as it has been for much of the cannabis legalization process. In September 2020, Governor Gavin Newsom signed bill A.B. 1525 into law. While it doesn’t erase federal guidelines, the law does permit the state’s regulators to act as a go-between for cannabis businesses and banks.
Instead of banks having to gather information and vet each business individually, the state can provide that information for them. With that burden removed, California banking institutions and cannabis businesses are set up to work together well.
A Priority in Washington
Federally, things also appear to be improving. Despite national popular approval for marijuana legalization, the U.S. Senate has long been a roadblock. Since the most recent election, however, new Senate Majority Leader Chuck Schumer (D-NY) and several other Senate Democrats have said they plan to prioritize comprehensive cannabis reform legislation during their current session.
Other congressional leaders have also been pushing for a new, more lenient approach to cannabis lending. For example, Rep. Ed Perlmutter (D-CO) has been working for several years to push his Secure and Fair Enforcement Banking Act through.
This bill would remove some of the limits facing cannabis businesses and banks nationwide. It’s passed the House several times but has repeatedly been held up in the Senate. With the shakeup of the Senate’s composition, it seems more likely that this and other cannabis-friendly bills will finally be passed.
It’s clear that nationwide, the tide is turning for cannabis legalization. It’s just a matter of time before the final barriers are removed and cannabis can be treated like any other consumer substance.
There’s no need to wait to secure funding, however. If you’re looking for cannabis financing now, Bespoke Financing is here to help. As a non-platform-specific financer, Bespoke Financial offers funding to operators who may not be able to access traditional loans. Get ahead of the curve with the assistance you need today.