CUs Try To Solve The Cannabis Cash Conundrum
A maxim in business holds that “cash is king.”
But cash may not be the most efficient way of doing business. At least not at scale, and not when it comes to helping nascent industries take flight.
The issue is particularly spotlighted by the cannabis industry, where, as noted this past week in Bloomberg, legal sales of cannabis topped $10 billion in 2018, as estimated by the Marijuana Business Factbook. Within the next several years, that could be worth $80 billion, according to research firm Cowen Inc.
And yet, beyond the patch quilt of states that have accepted marijuana sales, such transactions are illegal on a national level. This, in turn, means that banks cannot offer services to businesses, as they would face prosecution from regulators.
In at least one incremental move that would expand the ability of mainstream financial institutions to serve cannabis-focused firms, Rodney Hood, chairman of the National Credit Union Administration, has said the agency will not punish credit unions working with