The Hot Political Issue Facing New Cannabis Markets

This article was originally published on The Bluntness, and appears here with permission.

Now that voters in Arizona, Mississippi, Montana, New Jersey, and South Dakota have approved new cannabis measures, stakeholders entering the space will still have to contend with one of the industry’s most pressing challenges: banking.

One of the top minds in this area is Ralf Kaiser, CEO of Integrated Compliance Solutions, LLC, which helps cannabis companies in the legal adult-use markets with banking issues. 

Because cannabis is so tightly regulated, plant-touching companies must track their crops from seed to sale to maintain their state license. Kaiser’s company helps track the data through a SEED-TO-BANK (TM) service. Banks appreciate this since it means the money they are receiving is from a legitimate source.

According to Kaiser, BDS Analytics reported in 2019, 80 percent of all cannabis sales in California were black market sales, as were 70 percent of Massachusetts sales. Thus, banks have a reason to be wary. 

Risk Versus Opportunity in Cannabis Banking

The U.S. Treasury Department tracks suspicious banking transactions. And because cannabis is a Schedule I controlled substance, they seem to be keeping a close watch on banks working with cannabis companies.

For instance, Parke Bank was known in the industry for successfully accepting cannabis related businesses.  However, they have recently come under scrutiny by bank regulators regarding their compliance programs. Parke Bank was also quick in taking the necessary measures to increase supervision of its compliances programs, according to S&P Global. 

However, there will be a strong need for more banks to accept cannabis clients within the emerging state-level markets. And despite the risks, …

Full story available on Benzinga.com

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