The cannabis banking bill is a step toward the pot market being treat like ‘any other legal business’
Nearly five years after Missouri legalized medical marijuana, the state has now cleared the way for marijuana companies to bank easier.
Missouri Governor Mike Parson recently signed a bill that will change an at-times arduous and costly process that cannabis companies have to go through in order to access banking services.
The federal government does not recognize cannabis as a legal substance. Few credit card companies and federally regulated banks work with the industry as a result, causing cannabis businesses to stay strictly cash-based. Some even store their cash on-site. Doing so has opened them up for theft and robbery attempts.
Right now in Missouri, in order for banks to follow federal guidelines, they must gather information to determine whether cannabis businesses are legitimate and are operating within the confines of state regulations. Part of this requires banks to essentially audit cannabis facilities and send representatives to check out the locations on-site.
But doing so takes time, personnel and money, and further turns some banks away from working with cannabis companies. Plus, the process is needless — the Missouri Department of Health and Senior Services already performs such inspections.
Missouri’s new cannabis banking law takes the burden off banks and allows weed businesses to request state agencies to share the businesses’ applications, licenses or other regulated or financial information with a bank.
This is all part of the normalization of cannabis as the industry moves past stigmas, Hippos Cannabis CEO Nicholas Rinella says: “This is one more step for us to get treated like every other legal business.
“I think it’s going to open up the cannabis space in Missouri to more banking options,” Rinella adds. “It should reduce the cost for banks that are banking with us now and help lower the costs for everybody.”
It couldn’t have come at a better time. Adult-use marijuana sales started on February 3, further widening an already-burgeoning industry in Missouri. On average, about $4 million of legal cannabis has sold in Missouri per day since recreational marijuana sales began, according to Missouri Cannabis Trade Association. Total pot sales have reached $592.3 million in the past five months.
At the same time, jobs in cannabis have ballooned. About 15,000 Missourians work in Missouri’s cannabis industry. At Hippos Cannabis, Rinella says his staff has doubled since the start of recreational sales. Easier access to banking may allow the industry to grow even more, he says.
Zachary Post has worked at the helm of Missouri’s cannabis industry since medical marijuana was legalized. His nonprofit, Elite Home Growers Academy, teaches medical marijuana patients, veterans, and other home growers how to cultivate their own pot. His brand, Elitist Brand, breeds strains.
More financial service options are “severely needed” in the industry, Post says.
“As a minority group, having access to resources like loans for this doesn’t exist in cannabis right now,” Post says. “You can get other parties to invest in you, but you don’t have the opportunity to get a business loan from a bank.”
The legislation not only sought to remove financial barriers, but introduced a new aspect of security. The law mandates all workers in cannabis to submit to a fingerprint background check.
Cannabis employees already undergo background checks through the state, but their fingerprints aren’t taken, Missouri Independent reports. State law previously required fingerprinting for all employees. The constitutional amendment that legalized adult-use stopped that requirement.
Rinella says it’s too early to know whether the bill’s provision on fingerprinting will be good or bad.
“If they give us enough time, it shouldn’t be an issue,” Rinella says.
