Top 5 Banking Hurdles for Cannabis Operators | Cannabis Banking Help

When it comes to cannabis commerce, it is no secret the industry is riddled with hurdles that usually are a challenge to jump over. From lack of capital to the inability to easily pay employees, the federal government and banks continue to make it difficult for cannabis-related businesses to run their operations. 

What are some of the more common commerce-related hurdles cannabis operators face? Let’s take a look.

Lack of Access to Loans

One of the biggest clouds hanging over the industry is the lack of access to cannabis business loans. Unlike other industries such as clothing stores or restaurants, there are a finite amount of cannabis lenders willing and able to fund the industry, and with that being said, cannabis companies are subject to risk premiums. Historically, operators have tried to rely on self-funding to kickstart their company in hopes to attract external funding sources after the fact.

Complicated Compliance and Regulations

With more regulations than alcohol, cannabis remains incredibly complex when it comes to compliance. As State laws change and, hopefully soon, federal law, oversight and regulations are expected to remain in place. The regulatory complexity creates an increased cost to any organization, as a single misstep could lead to punitive or operational trouble.     

Inefficient eCommerce and Payment Processing Options

Right now, mainstream eCommerce platforms, such as Shopify, do not allow the sale of cannabis. Due to federal law, big banks and payment processors are not comfortable engaging in the cannabis space. This leaves cannabis operations, whether B2C orB2B, using cannabis-specific payment systems and or simply transacting in cash. The industry has first-hand experience with the public safety risk that cash imposes on their business and their employees, as well as the risk and inconvenience to collect and deposit it into their bank. 

Inability to Deposit Money

Going hand in hand with the issue of managing a business with cash is the expense and nuisance to deposit this cash into a business account if the cannabis business has a bank account. Unlike traditional retail businesses that can go to the bank and deposit money as part of a normal course of business, cannabis operators oftentimes succumb to holding hundreds of thousands of dollars in cash on-site to avoid the hassle and fees.

Employee Suffrage

One of the most astonishing issues cannabis operators face is how difficult the banks make it for employees to receive their paycheck. In an industry that supports 321,000 jobs, one would hope paying hardworking employees would not come with so much scrutiny. Employees are often questioned by their banks on their employment, and often times have their personal bank accounts shut down as a result of their employment in cannabis. 

While these hurdles can oftentimes seem impossible to cross, there are solutions – like Confia. Designed for B2B and B2C transactions, Confia was born out of the vital need for cannabis operators to have low-cost and efficient financial services that can support the compliance and transactional complexity of the cannabis industry. From direct deposits and automated compliance to access to capital, Confia is the solution cannabis operators need. 

Want to learn more about how Confia can help alleviate your commerce issues? Contact us today.