Massachusetts Credit Union to Provide Banking Services for Cannabis Companies

Massachusetts’ retail hashish market is probably every week or two away. For Massachusetts’ hashish shoppers and enterprise house owners, the official begin of retail gross sales has been a very long time coming. For regulators and regulation enforcement, nevertheless, a number of main considerations stay unsettled. Chief amongst them is the well-known and oft-cited “cash problem,” the shortage of entry to federally-backed monetary providers that forces hashish companies to be cash-only operations. But swooping in like some deus ex machina lower than every week earlier than the Cannabis Control Commission is probably going to greenlight the state’s first retail operation, one Massachusetts credit score union will present some key banking providers to hashish corporations within the leisure sector.

Credit Union Services Could Get Millions in Cash Off The Streets

The Boston Globe is reporting that GFA Federal Credit Union, a federally chartered small credit score union, will present banking and monetary administration providers to Massachusetts hashish corporations. The announcement makes GFA the primary monetary establishment within the state to open its doorways to the retail hashish business and comes after greater than a yr of preparations and analysis into making it work.

“We’re looking at cannabis business as a legitimate business that wants to be recognized as such and that, without banking services, presents a tremendous public safety issue in our communities,” GFA’s chief government Tina Sbrega advised the Globe. Beginning October 1, GFA will supply money administration, checking accounts, payroll, wire transfers and invoice funds.

Those key providers might assist get tens of millions of dollars in money off the streets. And for that purpose, public security and regulation enforcement businesses are praising GFA’s initiative. “Public safety-wise, this is a home run,” stated John Carmicheal, Walpole’s chief of police and a member of Massachusetts’ Cannabis Advisory Board. Typically trenchant of their opposition to adult-use legalization, Massachusetts police have persistently expressed their help for financial institution involvement.

Indeed, giving hashish corporations entry to banks provides officers oversight and the power to monitor transactions between licensed companies. That, in flip, makes fraud, tax evasion and black market diversion simpler to spot. Beyond that, it makes all the business and shoppers safer; a cash-only operation is far more prone to theft.

Are Small Banks The Answer To The Cannabis Cash Problem?

But regulation enforcement aren’t the one ones nodding their approval of GFA’s transfer. Massachusetts regulators and the business are additionally feeling relieved that monetary providers will probably be obtainable. Banking providers don’t simply make it simpler for clients to purchase hashish with plastic. They additionally scale back overhead and danger for the companies. Handling money transactions is time consuming and costly on prime of the logistics of masking enterprise bills like payroll.

Despite these advantages, nevertheless, most main banks have been hesitant to do enterprise with state-legal hashish corporations. Federal marijuana prohibition presents some critical dangers to monetary establishments backed by the federal government. But GFA isn’t a type of large establishments. It’s a credit score union with about $500 million in belongings. Both of these qualities imply GFA is unlikely to face an enforcement motion from the federal authorities. It additionally means its enterprise with hashish corporations gained’t put present shoppers and investments in danger.

Massachusetts Cannabis Control Commissioner chairman Steve Hoffman hopes extra banks and credit score unions will comply with GFA’s lead. It’s not a nasty concept. Smaller monetary establishments might step up the place bigger companies are thus far holding again, says Colorado-based Safe Harbor, an organization that helps monetary establishments work with hashish companies.

Could small banks be the reply to the hashish business’s money drawback? GFA is optimistic they are often. But they’re beginning cautiously. The credit score union will solely contract with 15 to 20 hashish corporations within the first yr. It additionally gained’t supply loans to small hashish companies, elevating considerations about fairness in an business already dominated by giant companies. GFA is assuring potential shoppers that it gained’t favor giant, already-established companies over smaller, newer corporations.


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