SPECIAL EDITION • THE NEXT NORMAL
Normalizing Cannabis Banking
By Stacy Litke, Green Check Verified
L
ike any new technology or line of business, there always seems to be three buckets of adopters. There's the early adopters — those on the bleeding edge who are always ready to try something new. There's the fast followers — those who want to be early to the game, but who are not quite as adventurous as the group that gets bruised in a new arena. Then there's the normalized group — those that wait until everyone else has tested the waters before jumping in. The U.S. financial industry’s adoption of cannabis banking is no exception to these categorizations. Of course, there were the pioneers who led the charge, took a few lumps and navigated through some operational mishaps along the way — all while learning from examiners who were also new to these programs. But now we are solidly in the era of the fast followers, those who waited enough time to clearly see
the opportunity and recognize that no one’s bank is getting shut down over this new line of business. We’ve been working with this group to build and scale programs for a few years now, and they are increasingly coming to us more educated on the industry and less intimidated by the opportunity. To me, this is a sign that we are moving towards normalization. In fact, about half the banks we talk to are aware that you can bank cannabis in a safe and compliant manner, and they are also aware that doing so provides a source of premium fee revenue and low-cost deposits that can bolster an institution’s performance. The remaining challenge that seems to concern many of them is the perception that you need an army of compliance experts to run a program. That may have been true for the pioneers, whose sometimes outdated metrics and best practices are shared over and over again without being
May-June 2021 •
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