In September 2021, The U.S. House of Representatives approved an amendment to its National Defense Authorization Act. It pushed cannabis banking reform to protect banks from federal law in operating with state-legal cannabis businesses.
As these banking services grow to become more cannabis-friendly, dispensaries most notably will be able to keep up with their operations much more efficiently.
The Cannabis Industry Can’t Bank the Traditional Way
Currently, cannabis businesses are being told they can’t bank the traditional way. Yet still being taxed the same – if not, more. There’s extra scrutiny around anything related to money, making it difficult to find lending opportunities. Fulfilling basic operating necessities, such as payroll, is a challenge.
Most cannabis businesses – including ancillary ones like our cannabis marketing agency – typically need a DBA without “cannabis” in it. This prevents banking institutions from freezing incoming payments.
With more classic banking services becoming available, dispensaries can pay vendors and staff on time through traditional channels, such as ACH, wire, or check. The business doesn’t need to hold and move their money through non-traditional or outdated methods.
Different States Have Different Rules for Cannabis Banking
Multi-state operators, for instance, have to comply with varying degrees of banking regulation. Therefore, they must obtain separate bank accounts for each state in which they operate.
With these new services, industry players can bank with large institutions like Chase or Bank of America. Businesses can centralize their finances to better manage their operations and marketing efforts.
Improving Cannabis Marketing Campaigns
As our Co-Founder and Managing Partner, Seth Worby, told MarketScale, the SAFE Banking bill will allow cannabis businesses to invest more in “areas that people can see the authenticity of the brands.”
The key for any business investing in marketing is to build a meaningful relationship with its customers. This is especially important for those in more restrictive industries, such as:
- Sexual wellness
- Dating apps
Seth says, “It all comes down to quality, experience, and ultimately, branding.”