Sahar Ayinehsazian Chats with WeedWeek About the Great Cannabis Banking Thaw
Aug 28, 2019
As most cannabis businesses know all too well, access to banking is a major pain point. But as support for cannabis banking grows in congress, bills that were previously frozen are starting to thaw.
WeedWeek hosts Alex Halperin and Donnell Alexander recently invited VS attorney Sahar Ayinehsazian to discuss the issue on their weekly podcast. During the broadcast, Sahar explained current state and federal banking laws, why banks are hesitant to service the cannabis industry, how credit unions are stepping up to the plate, lobbying and more. Read on or click here to listen to the broadcast.
Why are banks hesitant to get into the cannabis industry?
Sahar mentioned the many risks that make financial institutions fearful of working with the cannabis industry. These include:
- Losing their charter
- Damaging their reputation with conservative clients
- Losing FDIC and NCUA insurance
- Losing their account with the Federal Reserve
“The truth is that no financial institution has ever lost their insurance from working with the cannabis industry and no institutions that I know of have ever lost their account with the Fed,” Sahar explained.
What about credit unions?
"Credit unions have really stepped up to the plate, and not just in California," said Sahar. “To my knowledge, the vast majority of institutions taking on cannabis clients have been smaller, state-chartered credit unions. It is a good way to build assets and have their own niche clientele. Statistics from FinCEN as of last quarter show that 600-something financial institutions throughout the country are banking cannabis. A good portion of those are credit unions."
The hosts also asked about the corporatization of the cannabis industry, Sahar’s work with the National Cannabis Industry Association (NCIA), cannabis lobbying, and the security problems of running a cash business, including the storied “caves full of cannabis cash.”