Credit Union 1 in Alaska has announced that it will begin a pilot program of offering financial services to cannabis businesses in the state. This pilot program is scheduled to start in the first six months of 2019.
The step taken by Credit Union 1 is a brave one because the majority of the financial institutions in the country are hesitant to have cannabis businesses as clients due to the prohibitions at the federal level. Credit Union 1 is chartered at the state level.
The Credit Union revealed that it was driven by security concerns when making the decision to pilot offering banking services to the cannabis industry. James Wileman, the CEO of Credit Union 1, said that they didn’t have any moral or political opinion about cannabis when deciding to get involved in providing banking services to marijuana businesses.
Officials from the tax division of Alaska welcomed the decision taken by Credit Union 1, calling it “extremely good news.” They are right to feel that way, because it will be much easier for the tax authorities to collect their dues once there is a clear paper trail to track all the sales in the state.
Alaska is already enjoying massive tax returns from the marijuana industry. For example, the state received approximately $11 million in taxes from January up to September this year.
Marijuana businesses are also excited by the opportunity, and they are wondering why it took so long for a financial institution to take the plunge and welcome cannabis businesses. Many are wishing they could participate in the pilot program instead of waiting for the services to be rolled out to more businesses sometime in the future at the successful conclusion of the pilot program.
The situation in Alaska shows how slowly systems change in order to accommodate new realities. For example, voters approved recreational marijuana in 2014 and the state started issuing retail licenses in 2016, but not a single cannabis company has been able to get any form of banking services.
However, it was just a matter of time before the allure of the resources in the cannabis industry became too strong for the banking industry to ignore. Chances are high that many other financial institutions will be watching the developments at Credit Union 1 before coming to the table as well.
Cannabis companies like American Premium Water Corp. (OTC: HIPH) and Cannabis Strategic Ventures, Inc. (OTC: NUGS) welcome the pioneering efforts of Credit Union 1 and other financial institutions that are trailblazers in their jurisdictions in terms of providing essential financial services to this nascent industry.
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