Banks in “Red” states are starting to open their doors to the cannabis industry. And when marijuana entrepreneurs can access traditional finance services, it will mean big things for your cannabis investments…
You’ve heard me talk a lot about the trouble U.S. cannabis companies have with the banking sector. As you know, cannabis is still illegal under federal law, and banks don’t want to be accused of working with an “illicit” business.
Today, I want to make sure you know why I’m releasing so many cannabis banking reports.
It’s part of a story that I’m following closely – one I will continually expand upon in Cannabis Profits Daily – because when we reach the final chapter, the investors who got in early could be the ones to reap the biggest rewards.
Right now, we are in the “Land Rush” stage where companies are staking their claim in what could be a $1 trillion market. After that, we’re going to reach the “Settlement” stage, and that is when we will see a number of major changes, including banking reform.
Finally, we’ll reach the “Maturity” stage, and that’s when early investors could be the ones to sit back and count their riches.
Now, it’s true there are examples of banks working with cannabis companies and statewide programs trying to get established.
In California, for example, there’s a push to make banking access more available to cannabis companies. Hardcar Security started working on a pilot program in 2017 that helped the largest cannabis accounts in California deposit money. Hardcar deposited cash in the Federal Bank of San Francisco for large accounts, according to Green Market Report.
The Golden State has a ton of money to spend – California was the world’s fifth-largest economy in 2018 – and cannabis consumption is ingrained in the state’s culture.
You would think that if any cannabis business would need to work with a bank to handle large amounts of cash, it would be in California. However, they are having a rocky start to legalization, and the industry isn’t as large as state politicians expected. I’m going to talk about that more in Cannabis Profits Daily later this week.
But what’s really encouraging is smaller banks in “Red” states pushing to make banking easier for marijuana entrepreneurs. In case you missed it, I recently wrote a report about a bank in Arkansas that is taking a stand and working with medical cannabis companies.
WV Is Leading the Charge for Cannabis Banking Reform
The West Virginia House of Delegates overwhelmingly approved a bill on February 15 that would allow banks to work with medical marijuana companies.
The legislation would authorize West Virginia to open a bidding process for financial institutions and banks that want to work with medical cannabis companies and are willing to process the fees, penalties, and taxes collected under the state’s medical program.
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The bill would also ensure that federal prosecutors will not interfere with banks and financial institutions working with medical cannabis companies that follow state law. With medical cannabis products slated to hit the shelves in West Virginia on July 1, I expect we’re going to see cannabis banking frameworks set up sooner than later.
There’s going to be a few kinks to work out, but it will set an example of how a “Red” state could establish a legal cannabis system with proper regulations and oversight.
And remember the bankers working with medical companies now are gaining invaluable experience.
The West Virginia approach, with banks collecting taxes and fees, also reinforces something our Advisory Board member John Vardaman told us last month about why cryptocurrencies will never be an important part of cannabis finance – regulators want money to be attached to banks because that is who they trust.
When full legalization hits the U.S., the banks and financial institutions who worked with medical cannabis clients early will attract recreational clients because of their expertise.
Tomorrow, check back for my full report on cannabis legalization efforts in New York and New Jersey.
And because we’ve received so many questions, here’s more information on how you can access NICILytics.
Thank you for being a founding member of the National Institute for Cannabis Investors,
Executive Director, National Institute for Cannabis Investors
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February 26 2019