American Banker Article: BankThink A tech solution to the pot banking problem

Many legal cannabis suppliers and retailers are being forced to operate in a cash-intensive market due to federal laws that limit access to traditional banking. This poses significant risk as cash-based industries, companies and trade can’t be properly monitored, regulated or taxed. And this is particularly concerning for the legal cannabis market that’s expanding to $12 billion in sales this year, with projections to reach $30 billion in four years. Banks face four significant challenges when servicing the cannabis industry, according to a California state-backed report. First, the bank may be at risk of criminal or civil liability under federal drug and banking laws. Moreover, because this large industry is new and rapidly evolving, it creates business risks even without enforcement of the federal drug laws. Another factor is the significant administrative burden to properly file the required federal reports governing cannabis banking transactions, and the potentially severe penalties for incorrect filings. Also, the know-your-customer requirements are more significant than normal because similar transactions may or may not be allowed pending various state laws. As a result, banks are cautiously entering the market, which therein limits the ability of cannabis companies to operate in a traditional fiscal environment: using checks, credit cards, electronic transfers and…

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Source : CANNANNEW REPORT
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