According to Bloomberg, the Native Americans are getting ready to accept cash earned by cannabis growers and sellers who are not able to deposit it in regular banks due to the still federally illegal nature of what they are doing. The report indicates that only about 220 of the 7600 American banks accept cannabis cash. For others, the compliance hassles just don’t seem worth it currently. The hope of one Anthony Rivera, a Harvard B School grad and leader of the Acjachemen Nation in Southern California, is to set up their own banks much as they did casinos decades ago. He has started a management company to assist folks in doing so within the tribal nations.
The stories of how the state-legal cannabis entrepreneurs deal with their cash are movie-worthy. Some build huge vaults. But there is still the need to transport the cash which of course raises its own dangers. The “ancillary” businesses such as equipment manufacturers and real estate folks seem to have much less trouble taking cash they receive from sellers/growers and depositing it. But the front line companies are still struggling with their Hamiltons in this now multi-billion dollar business.
Of course the Native Americans will make sure that they also comply with other applicable regulations, but it seems that this might be a unique opportunity, at least until banks get more comfortable or Congress changes things, to provide a proper banking solution for those complying with state law to grow and sell cannabis.
Read additional articles at the David Feldman Blog.
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