What 2020 Might Bring for Cannabis Banking

Jan 10, 2020

Cannabis products have been in hot demand over the last few years, especially after the passage of the Farm Bill in 2018. In fact, sales are projected to hit nearly $30 billion by 2025. But there are some concerns about the rising sales in the cannabis industry. In 2018, sales topped $10 billion and all of that had to be done in cash.

The problem with cash extends beyond inconvenience, though that does have serious impacts not just the customers, but for growers, vendors and distributors too. The limits of cash mean that all sales have to be done in person and that cash must first be obtained by customers in a world where more and more people are no longer carrying cash on them. There are also concerns about the safety of storing and transporting such large sums of cash. 

Some merchants try to get around the issue by fudging the information that they provide for their merchant accounts. While this may temporarily allow them to conduct business with credit and debit cards, they run a serious risk of being caught, fined and blacklisted from ever having another merchant account.

The obvious answer that everyone is hoping for is the ability to conduct business with banks on a widescale level. Currently, because of the murky legality of cannabis and its related products on the federal level, most banks won’t touch merchant accounts that have a hand in the cannabis industry.

Of course, there are some banks throughout the US that will provide services to cannabis local cannabis merchants. This includes a few financial institutions in California and Colorado. These brick-and-mortar financial institutions have taken on select cannabis clientele based on adherence to all compliance regulations, rigorous standards, background checks and continuous access to their point of sale systems. 

However, it would be ideal for the cannabis industry to have access to banking without jumping through so many hoops. Enter in technology platforms specifically designed for the cannabis industry, like Alt Thirty Six, which is currently operating in Arizona, California and Oregon. 

But there’s still a need for a more traditional solution.

Where is Cannabis Banking Headed?

The federal government has been slow to adopt legislation that would protect the cannabis industry as well as the financial industries that might serve them.

There is hope, however, in the form of the Secure and Fair Enforcement (SAFE) Banking Act (H.R. 1595). It has received wide support from lobbyists and politicians alike and was passed in the House of Representatives in late September 2019

While it seems likely that the bill will pass in the Senate, some changes might be made first. One of these possible changes includes a part about reputational challenges that would allow banks to decline services to any business that might pose reputational harm to the financial institution.

Both advocates and detractors have expressed concerns about the SAFE Banking Act. Some worry that the measures don’t provide enough protection while anti-cannabis groups worry that the legislation legitimizes the industry. 

While it’s not a perfect solution, action is expected to be taken on the SAFE Banking Act before the end of the year, which could pave a better financial future for the cannabis industry in 2020 and open the door for better solutions.


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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.