California cannabis entrepreneurs will earn $5.2B in revenue in 2018 as recreational use becomes legal there. The state of California will collect about one billion dollars in accompanying marijuana taxes. These numbers, estimated by Matt Karnes, industry analyst and managing partner of New York’s GreenWave Advisors, point to the giant need for banking and financial services in the nascent legal cannabis industry. These services however are generally not available says Karnes, and are federally illegal. Some glimmers of change though, are on the horizon.
Banking is severely limited for cannabis industry businesses. As a “schedule one” substance, cannabis is categorized to be as harmful as heroin and banks risk losing their federal charter if they work with cannabis companies. Financial institutions need to go on record with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCen) when they establish a relationship with a known Marijuana Related Business, and Karnes estimates that just 5% of all banks have done that. He believes that fewer than 1% of all banks in the United States are currently working with cannabis related companies.
– Read the entire article at Forbes News.