California is getting closer to making the sales of legal adult use marijuana a reality, but the problem of banking still wasn’t resolved. Even though medical marijuana has been legal for years, the issue of banking has never really been addressed in a meaningful way.
The big banks refuse to take these customers because marijuana is still federally illegal. State Treasurer John Chiang knew this was a problem that had to be fixed before the adult use cash registers started ringing. The Cannabis Banking Working Group was formed with representatives from law enforcement, regulators, banks, credit unions, tax authorities and government officials. They listened to solutions ranging from pre-paid cards to bitcoins and ultimately landed on a solution from the Colorado Credit Union.
The Safe Harbor Private Bank is going to be a compliance based cannabis banking program that is a division of the Colorado Credit Union. It is adopting the Credit Union’s Marijuana Related Business program and testing it out on a cannabis event company called EventHi.
Sundie Seefried, the CEO of Colorado-based Safe Harbor Private Banking said, “We have undergone four state and federal exams successfully and we serve 130 cannabis-related businesses with annual deposits totaling $1 billion. As a credit union, our commitment is serving an underserved, unbanked cannabis industry, keeping communities safer and helping Safe Harbor clients, like Ali Fakhri of EventHi, conduct business safely.”
It wasn’t a slam dunk for EventHi though. Safe Harbor put the company through its due diligence process which included background checks, in-depth company research, interaction and implementation of Anti-Laundering Money procedures implemented into their software and business model. In the end, they were approved.
This was great news for EventHi, which had been unsuccessful at finding a bank for the past 11 months. The company has been in development for the past two years and is like services like Ticketmaster and Eventbrite. Ali Fakhri, CEO of EventHi said, “This program gives me the security to run my company like any other business and most importantly gives me the safety that I can offer to my employees while working at EventHi. I believe that the MRB program is the best solution for banks to adopt in California to handle the crisis in 2018.”
EventHi can throw themselves a party and celebrate their new bank account as they launch their site in August. What is taken for granted in other industries is cause for celebration in the cannabis industry.