Cannabis banking draws more interest
For years, only a small number of banks and credit unions have been willing to offer their services to the cannabis industry, giving its cash-laden businesses a place to safely deposit their money without fear of a robbery.
But the number of institutions willing to do so appears to be growing. And now, those early adopters are moving beyond deposit services and slowly starting to offer loans to the cannabis industry — which has struggled to get access to credit even as more states legalize the drug.
Those efforts could get a boost from President Joe Biden's administration and the Democratic majority in Congress. Even if policymakers opt against legalizing the drug at the federal level, analysts say the banking industry may get the green light to offer services to cannabis companies in states where the drug is legal.
The interest is spreading beyond just smaller financial institutions. Wayne, N.J.-based Valley National Bancorp, a regional bank with more than $40 billion in assets, has launched a pilot program to accept deposits from a few larger corporate customers. It sees an opportunity to help multi-state operators manage their operations in compliance with different states' regulations by using software that verifies the legality of each transaction ahead of time.
Source: S&P Global Market Intelligence