GARDNER, Ma- Massachusetts recreational cannabis dispensaries could soon have access to banking services.
GFA Federal Credit Union has announced a plan to become the first financial institution in Massachusetts to do business with recreational cannabis businesses. GFA has been formulating a plan to work with the cannabis industry for about a year.
Recreational cannabis dispensaries will be able to use debit cards as opposed to cash-only transactions for purchasing products. Providing access to the banking system does more than simply offer customers convenient payment options. Cannabis shops are often a prime target for criminals since large sums of cash are often kept on the premises. GFA will provide dispensaries with a way to store money offsite and set up checking accounts. Banking also allows for further transparency and reduces the chances of fraud through cash-only transactions.
While other financial institutions have largely avoided the cannabis industry, GFA executive Tina Sbrega feels that her company can legally work with cannabis companies.
“We’re looking at a cannabis business as a legitimate business that wants to be recognized as such and that, without banking services, presents a tremendous public safety issue in our communities,” Sbrega said according to the Boston Globe. “Otherwise, you’re talking millions and millions of dollars of cash on the street.”
GFA will begin to accept clients by the start of next month and will be offering services such as cash management, checking accounts, payroll management, wire transfers, and bill payments. In order to vet businesses, GFA will be partnering with Safe Harbor, a private bank based in Colorado that works with cannabis companies.
Members of Massachusetts growing cannabis industry were pleased to hear about GFA’s decision.
“It’s a hard thing to ask someone to walk around with $20,000 in their pocket when people know this is a cash industry,” said Jim Smith, an attorney who works with the cannabis industry. “Convenience stores get robbed for just a few hundred bucks — we don’t want that. We don’t want cash. We want to work like a traditional retailer, with debit cards and everything else.”
Laury Lucien, an attorney seeking to operate her own cultivation operation and dispensary in southern Massachusetts was interested with working with GFA.
“Having an institution where we could deposit our cash would be so helpful,” Lucien said. “Otherwise, it makes me anxious to think about all the simple things an ordinary business takes for granted — paying your bills, your employees, keeping track of taxes. Doing everything with large amounts of cash is expensive and time-consuming, and it creates lots of room for error and diversion.”
Even state officials are supportive of offering financial services to the cannabis industry. Steve Hoffman, Chairman of the Cannabis Control Commission is hopeful that crime can be reduced if cannabis companies have the opportunity to utilize banking services.
“It’s a real big deal that GFA decided to enter this industry,” Hoffman said in an interview according to the Boston Globe. “I expect that it’s going to look like other states, where once the first institution dips its toes in the water, there will be others that follow.”
There are still some financial issues that remain for Massachusetts based cannabis businesses. Dispensaries and other cannabis organizations have trouble acquiring capital to start their operations or to expand. Currently, GFA will not be offering loans to members of the cannabis industry but is currently weighing the possiblility of doing so next year.