Look at your news feed from week to week and you’ll see there is an increasingly growing number of states legalizing medical and adult-use marijuana.
Even so, federal prohibition of marijuana continues to make it difficult for cannabis companies to get the funding they need to open up and flourish.
Banking reform is the missing piece in this scenario.
Banking Reform Is Overdue
Like all businesses, marijuana companies need certain tools and services in order to operate legally and responsibly. The banking sector can play a major role in this.
Here’s how banking reform would help cannabis businesses:
Gained Access to Needed Capital
One of the biggest challenges cannabis companies face is access to capital for services that will advance their business, such as effective cannabis marketing.
These businesses could benefit from lines of credit, business loans, and other financial tool that are essential for success in other industries. Furthermore, access to the banking sector would legitimize the cannabis industry and stimulate economic growth.
More Job Creation
Banking reform would allow cannabis companies to expand operations and, in turn, create more job opportunities. Especially in areas that have been disproportionately affected by the war on drugs.
Creating more jobs in the cannabis would also have a ripple effect on other related industries such as retail, agriculture, and transportation.
Obviously, having to deal with purely cash-based in problematic. Security issues put business owners, employees, and customers at greater risk and jeopardize their safety.
Conversely, using banking services for larger transactions decreases this risk and makes the industry safer for everyone.
A Hit to the Illicit Market
Another hurdle the cannabis industry must clear is the absence transparency and accountability. The illicit market thrives on this absence. In allowing banking services, regulators can ensure the enhancement of both of these.
Since banks are well-trained in monitoring transactions and due diligence, they can help prevent tax evasion, money laundering, or other illegal activities connected with the illicit market.
Safety for Consumers
Since legal cannabis companies are subject to regulations that protect customers, integrating banking services will further facilitate compliance with state regulations. This means that customers will not be exposed to unregulated and untested products that could prove to be unsafe.
Increased Research and Development
For a long time, R&D in the cannabis industry was limited to a small crop of federally grown and regulated weed. And it was limited, to say the least.
By enabling cannabis companies with banking services, they can invest in research and development to drive innovation in products and services. The end result? Increased efficacy, improved products, and overall acceptance of marijuana in the medical and wellness industries.
As mentioned earlier, regulatory compliance is a key component of the cannabis industry. It’s also necessary for its legitimacy.
By working in tandem with regulatory agencies, banking institutions ensure that businesses adhere to these laws. All of this encourages responsible practices and promotes legitimacy.
Ease in Tax Collection
One of the biggest reasons communities opt for cannabis companies in their jurisdictions is that these markets generate significant tax revenue for governments.
Banking services ensure more efficient tax collection to verify that this revenue is directed to education, infrastructure, and other public services.
Helping the Cannabis Industry
It is clear that banking reform could go the distance in helping cannabis companies to thrive and grow.
In the meantime, if you have a cannabis business that isn’t getting the attention it needs, contact us today. As cannabis marketing and public relations experts, we can put your company in the spotlight.
It’s time to get noticed.