While some marijuana businesses may be operating legally under state law, the federal law that still considers them illegal means banks often refuse to provide financial services to these companies. SMEs in the industry, reports have shown, are forced to operate as a cash-only business, bringing with it challenges in managing cash flow and security.
But the legal marijuana business scored two big wins last week.
The first came from Microsoft, which announced that it would enter the industry by partnering with KIND Financial to develop a way for government entities to track the operations of these firms. The move, reports said on Friday (June 17), makes Microsoft the largest tech conglomerate to step into this vertical and will see the firm providing cloud technology and services to track the industry’s transactions, seed-to-sale.
KIND Financial has previously introduced solutions to help marijuana businesses accept electronic payments and has positioned itself to provide a full breadth of financial services to the industry that struggles to access even basic banking services.
It is unknown whether Microsoft will also play a part in KIND’s financial services efforts.
But the industry secured a second boost to its effort to get banked last week. Reports on Friday also said the Senate Appropriations Committee passed the Financial Services and General Government appropriations bill, a move that would provide legal marijuana SMEs with access to banking services.
“The federal government should not be forcing Oregon’s legal marijuana businesses to carry gym bags full of cash to pay their taxes, employees and bills,” said Sen. Jeff Merkley (D-OR), who championed the legislation and co-wrote an amendment to the bill to focus on providing financial services to the companies. “This is an invitation to robberies, money laundering and organized crime. We need to enable our banks to serve these legal businesses without fearing devastating reprisals from the federal government.”
Sen. Patty Murray (D-WA), who also co-wrote the amendment, said the legislation “is really about providing clarity, stability and security for our banks, credit unions and small business owners who want to be able to operate in full daylight.”