Potcast 122: Cannabis Banking
Billions of dollars are generated by the hemp and cannabis industries, and not many banks want the money. We’re unpacking that on today’s potcast with Dana Chavez, an OG of cannabis banking. She shares her experience and insights with ganjapreneurs and those aspiring to enter the hemp and cannabis business. Get ready to understand both the playing field and the pitfalls of establishing banking in the cannabis space and how to use your voice for financial change.
'After the Show' Notes
I thought finding a banking partner for my hemp-based business would be an easy task, but it turned out to be my biggest headache of 2019.
My experience is probably similar to other ganjapreneurs:
The long search for a banking partner includes many rejections + SO MANY FORMS with personal data being handed over, interviews, and time lost. This process got so frustrating that I left some banks in tears.
Turn to non-traditional banking options out of desperation and find the fees shocking/unavoidable. Many people touching the cannabis plant think this is their only option, but that's not true!
Hire a banking matchmaker for targeted interviews w/ banks that take cannabis industry business. This exercise led me to First Federal Bank of Florida, where I met Dana, my new banker.
Difficulty finding merchant services once banking is established - And I'm still looking! This is a gray area operationally as Visa and Mastercard don’t want to play ball in the cannabis space. The Pin Debit Solution has been the work-around.
I discovered today's guest somewhere along that journey.
Dana Chavez has been an asset in helping me understand and navigate the rocky roads of specialty banking. Dana is Senior Vice President - Director of Specialty Banking Relations for First Federal Bank of Florida. For five years and counting, Dana works tirelessly to build strategic banking, financial and legislative relationships to further the cannabis industry's access to banking and financial services. Prior to joining First Federal in February 2019, Dana worked at Hybrid Payroll as the Director of Banking Relations and Partner Colorado Credit Union (PCCU) also known as Safe Harbor Private Bank providing some of the earliest access to banking services to the cannabis industry.
According to Dana, there are currently about fifty banks across the United States with an open compliant cannabis banking program. These banks are able to do that because they’ve evaluated the risk involved and the expenses of having such a program. Appetite and education are the deciding factors for each banking institution deciding to enter the cannabis banking space.
Because these cannabis-friendly banks aren’t public information - although you learned about two on this potcast #highfive - a banking matchmaker can help you find cannabis-friendly institutions and make an introduction. I used FinCann and had a positive experience with attentive customer care. FinCann maintains a nationwide cannabis banking financial network and pairs your business with the best potential banking partners. But be cautious and do your homework. There are a lot of snake oil salesmen out there.
Before cannabis banking, Dana taught financial literacy courses at Johnson and Wales University and the CU@Denver PEER 1 program and served on the Partner Colorado Foundation, raising funds for Education for three years. Earlier, Dana traveled with the US State Department and The Department of Energy on worldwide energy trade missions advocating and lobbying on behalf of Renewable Energy.
Dana makes time to advocate for causes that mean a great deal to her, including her role as Banking Access Committee Chairman of the National Cannabis Industry Association and her Co-Authorship of a White Paper directed to Financial Institutions and State Regulatory Agencies on banking the cannabis industry. Most recently, Dana was asked to testify to the House Small Business Committee in Washington, DC, on banking and lending for the Cannabis industry.
Dana Chavez, Senior Vice President - Director of Specialty Banking Relations for First Federal Bank of Florida.
Connect with Dana on LinkedIn.
Click the link below for the tips Dana shared for assessing a banking partner and payment solutions providers.
CALL TO ACTION
The SAFE Banking Act passed through the U.S. House of Representatives at the end of 2019 and now sits in committee in the Senate. We need a collective effort to push this important legislation along.
The National Cannabis Industry Association, in collaboration with other cannabis-related organizations, drafted a letter to Senate Banking Committee Chairman Mike Crapo (R-ID), urging him to move the House version of the SAFE Banking Act through committee and to the Senate floor for a vote.
The letter also addressed serious concerns the industry finds with one of Sen. Crapo’s suggested amendments to limit the provisions of the SAFE Banking Act to products containing less than 2% THC.
Now we need the help of businesses in the cannabis industry to join us in letting Chairman Crapo know how important it is to move the SAFE Banking Act through Committee this session of Congress.
GROWING HOPE
The Growing Hope Foundation is an avenue for cannabis businesses to support worthy causes they believe in and give back to their communities. Partner Colorado Credit Union is a thought leader in cannabis industry banking, with the primary goals of making our communities safer and serving the underserved. If you’re looking for a banking partner that cares about our community, call Partner Colorado!
One of the biggest advantages of being active in a community is the rapid dissemination of knowledge and the teaming together for resource sharing and greater impact. If you know someone’s who’s struggling with the banking headaches of getting their cannabis or hemp business off the ground, I hope you’ll share this potcast with them.