In the U.S., there isn’t really such thing as an unbanked business — except when it comes to the legal marijuana industry. As individual states begin passing laws that allow for small businesses to launch marijuana sales, national banks have turned away from these companies for fear of legal repercussions, as marijuana is still illegal under federal law.
The situation has resulted in a few legal battles, as well as a few financial institutions exploring whether they can safely (and legally) step up and provide banking services to these businesses.
Reports from Bloomberg published Monday (Oct. 12) said some legal marijuana businesses are turning to the American Indian banking system to solve their needs.
[bctt tweet=”Some legal marijuana SMEs are turning to the American Indian banking system to solve their needs.”]
A new organization, CannaNative, has formed as part of this effort. Launched by Anthony Rivera, CannaNative is seeking ways to connect legal marijuana businesses with financial service providers in American Indian nations. Rivera told Bloomberg that financial management and banking experience gained by managing casinos means American Indian FinServ firms can be perfect for managing the cash of legal marijuana companies.
“The Indian casinos are basically small little banks,” Rivera said in an interview. “They receive deposits in the form of gaming, and they manage that cash in a way which is highly regulated with commissioners and regulators.”
According to Bloomberg and statistics from the U.S. Treasury Department, there are just 220 banks and credit unions out of the more than 7,600 in operation today that provide banking services to cannabis businesses.
CannaNative isn’t starting from scratch, though. Reports said that about a year ago, the U.S. Department of Justice allowed American Indian tribes to legalize marijuana, just as individual states are now allowed to do so.
But Rivera said that one of the biggest challenges is complying not only with the laws of a tribal territory but also with the laws of the states with which that territory overlaps, as well as federal law.
Reports said CannaNative is working with financial professionals in the 566 sovereign American Indian nations to link them to legal marijuana businesses in the country.
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