The legal marijuana industry reached $6.7 billion in revenues in 2016, and is expected to grow at a compound annual rate of 17%, per New Frontier Data projections. Forbes reported that medical marijuana sales will reach $13.3 billion by 2020, while adult recreational sales will grow to $11.2 billion by 2020, employing more jobs than manufacturing.
But how can that industry take off when banks are unable to take those businesses on as customers? Banks cannot take the risk to deal with these businesses, as they are still considered to be doing ‘illegal activity’ and for banks, that’s a no-go avenue, due to federal banking laws.
And what do the marijuana business entrepreneurs do with the thousands of dollars in cash that there shops bring in?
If these businesses cannot process payments of money to banks, it leaves these shops vulnerable to crime. The operators of these shops will have large amounts of cash at the end of the business day, and in some cases, thieves will be waiting nearby. With California expected to go live in January [2018?] with legal sales of recreational marijuana, the problem may become much larger.
The Cannabis Banking Working Group in California is trying to address these issues. The latest steps from this group are to slowly but surely march toward a little banking at a time. They are hoping to slowly remove the barriers that bar banks from dealing with so-called illegal activity in businesses.
So for the time being, the question remains: how can companies today manage the banking for marijuana businesses that banks can’t do? One Arizona company is bringing a technology solution to the banking dilemma.
Hypur Inc. solves a vexing problem for banks, credit unions, and other financial institutions – how to profitably serve and manage payments from cash-intensive businesses like legal cannabis outlets.
Hypur bridges that gap with payment technology for banks wanting to profitably service money-service businesses, while providing a high-level of compliance and due diligence. In short, increasing data transparency leads to improved risk mitigation, which improves the efficiency and regularity of compliance activity.
Here’s how Hypur’s tech solutions can benefit cash-based marijuana businesses:
Safer than cash – Less cash on hand means lower risk of theft for both businesses and consumers.
Faster checkout – Pre-verified consumers simply check in and authorize transactions with their PAC number.
Cutting-edge security – Ultra-secure systems that go far beyond PCI compliant, with personal information secured behind 7 layers of security.
As we near the end of 2017, this banking issue has become a tension-filled situation for government administrators eager to get their hands on more tax monies from growing businesses, and marijuana business eager to play by the rules. For now, moving to Hypur’s banking solution might be the right move.