During the November 2022 elections, voters in the state of Missouri approved a resolution legalizing the recreational use of marijuana. Legal possession of marijuana for individuals aged 21 years and above became legal in December 2022, with the first licensed sales occurring in February 2023.
However, while significant strides have been made, the inability of cannabis firms to access full banking services is still a problem.
Currently, Triad Bank is one among a handful of banks in the state that work with marijuana businesses. This is mainly because marijuana is still illegal at the federal level, despite being legal at the state level.
Missouri Bankers Association President Jackson Hataway states that the divide between state and federal stances on marijuana have put banks in a tricky situation. Cannabis business owners still can’t have business credit cards, because most credit card want want no links with businesses that sell federally illegal products. This has put many companies at risk of robberies or extortion because all transactions for marijuana businesses across the country are cash based.
The differing stances have also led to the creation of the cannabis banking ecosystem, which is made up of certain banks that work with cannabis businesses and the financial technology firms that provide a range of services to keep the businesses federally compliant.
Fintechs work with financial institutions as agents or brokers for cannabis businesses.
While it’s unclear how many banks in the state service cannabis businesses, it is common knowledge that financial technology companies are the largest advertisers of marijuana banking services. A popular financial tech company, Safe Harbour Financial, has a huge footprint in Missouri’s marijuana market. The company’s business development officer, Tyler Beuerlein, stated that the entity banked a number of operators and were focused on expanding the relationships.
He also notes that its large client base in Missouri was brought in mainly because of the company’s history of working with cannabis companies in other states.
Other banks servicing this growing market include Regent Bank in Springfield and MRV Banks in southeastern Missouri. The director of the cannabis banking program at Regent Bank, Keri Cain, believes that more banks need to start providing their services to these businesses, which are part of a billion-dollar industry. Cain posits that the primary reason why more banks don’t want to service cannabis businesses is the capacity required for the task.
It should be noted that banks can provide services to the cannabis industry, as long as they adhere to the Financial Crimes Enforcement Network (FinCEN) guidelines.
The lack of access to full banking services can hamper companies that would like to scale up their operations by obtaining additional cultivation equipment from the likes of Advanced Container Technologies Inc. (OTC: ACTX) because financing may be hard to come by. This could curtail the rate at which the industry grows.
NOTE TO INVESTORS: The latest news and updates relating to Advanced Container Technologies Inc. (OTC: ACTX) are available in the company’s newsroom at https://cnw.fm/ACTX
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