North Bay Credit Union, which was early in offering banking services to the cannabis industry, plans to introduce a platform designed to help other financial institutions negotiate the industry’s intensely regulated compliance rules.
HigherGrowth, which will go live at the end of October, will be available for a fee to other financial institutions — including those across state lines, the Sonoma County credit union announced. Fees may range from $500 to $1,500 a month, depending on the account.
Only a fraction of the nation’s banks and credit unions now accept cannabis operators as account holders because the substance is still considered an illegal Schedule 1 drug by the federal government.
However, 39 states have legalized cannabis in the United States, which is estimated to see sales top $40 billion by 2025. Many cannabis operators are forced to handle mega amounts of cash, making finances sometimes unsafe and less organized than having a bank account.
Here’s why North Bay Credit Union said it decided to offer this type of service:
“There is more cannabis business than we can accommodate, plus our credit union can only serve California customers. This new entity can serve the banking of cannabis nationwide,” the credit union’s CEO Chris Call told the Business Journal.
Eighteen staffers manage more than 300 accounts.
“We expect more financial institutions will embrace this industry as cannabis acceptance grows,” said Carole McCormick, president of HigherGrowth and the credit union’s compliance chief.
McCormick plans to provide more demonstrations and conferences to illustrate the benefits of the service.
North Bay Credit Union enlisted the help of Austin Capital Trust Company of Henderson, Nevada, and MRB Direct, a Silicon Valley software service, to create the program.
Susan Wood covers law, cannabis, production, biotech, energy, transportation, agriculture as well as banking and finance. For 25 years, Susan