By Sundie Seefried, CEO of Safe Harbor Private Banking
For nearly three years, we’ve provided banking services to more than 100 cannabis businesses through Safe Harbor Private Banking and now process $80mm of deposits per month. As a credit union, I feel we have an obligation to serve the underserved and unbanked and made a commitment to take cash off the streets and keep our communities safer throughout Colorado. We are now maxing out our capacity and quickly approaching the limit on the amount of deposits we can accept from cannabis companies. So, our focus now includes raising awareness and educating nationally. Through speeches and editorials and face-to-face meetings, we are doing all we can to help other banks and credit unions serve the industry and help to ensure the safety of their communities. As part of that effort, we are also hosting a free webinar series to share information and candidly answer questions.
The first webinar held on July 13 had nearly 100 attendees that included bankers, risk managers, investors and business owners. I addressed how credit unions and other financial institutions can help their membership and communities by accepting deposits from the cannabis industry in a federally compliant manner. During the audience Q&A, I spoke about the challenges and solutions of cannabis banking and the regulatory and legislative issues. You can listen to the audio here: https://safeharborprivatebanking.com and read a summary here: http://bit.ly/2vCHVNY.
Here are a few of the key takeaways:
There are risks. Taking cash off the streets helps to keep communities safer, but banking cannabis businesses opens the door to potential risks and severe consequences, even prosecution, if you’re not diligent. Recently, the Federal Reserve fined Deutsche Bank $41 million for failing to maintain adequate protections against money laundering. A fine like that would put many financial institutions out of business.
It’s all about relationships. When opening an account at Safe Harbor, there is a face-to-face meeting with the cannabis business owner who is evaluated on whether or not they’re the right fit to open an account. Once an account is opened, a credit union representative makes onsite visits and collects and analyzes documents from each potential business member.
Prepare an exit strategy. Be sure to be in a position to liquidate all cannabis accounts if you need to one day exit the market.
Read the book. Everything you need to know about starting a cannabis banking program is in the book, “Navigating Safe Harbor: Cannabis Banking in a Time of Uncertainty” available in print or to download now.
The topic of the next webinar will be “Cashless Retail Solutions for the Cannabis Industry” with guest speaker Dustin Eide, CEO of CanPay, on September 19 at 10am-noon. The webinar will cover merchant card processing and cashless payment solutions for the cannabis industry. A Q&A session will follow with the guest speaker and Safe Harbor’s CEO, Sundie Seefried.