Marijuana businesses in the state will finally have a financial institution at their disposal
A credit union in Alaska isn’t waiting for the feds to approve marijuana before giving businesses in the industry a banking partner. Credit Union 1 announced yesterday that it will launch a pilot program for marijuana companies to give them a financial option. While many banks are too scared to embrace the industry because of federal banking laws, the credit union feels that it has held off long enough and added that the decision comes with “no political or moral position” on marijuana.
One of the biggest issues facing the marijuana industry right now is that it is primarily an all-cash market. The hesitation on the part of financial institutions to deal with marijuana businesses has forced virtually all transactions to be conducted in cash, which causes several issues. It is a major safety concern, with large amounts of cash proving to be too tempting for some crooks, and it also impairs a business’s ability to apply for financial assistance to launch operations or expand. According to the credit union’s CEO, James Wileman, “It’s a lot of cash. Imagine running your own life without having access to banking.”
Credit Union 1 is chartered by the state, which gives it a great deal of credibility. The pilot is expected to be launched at some point during the first half of next year and Wileman points out that the market isn’t just underserved, “this segment of business is completely not served.”
The move is also going to benefit the state. Being a cash-only business makes it more difficult to track the money flow, meaning that Alaska could be missing out on tax revenue. The state received $11 million in taxes from the industry over the first nine months of 2018, but could see much more. Alaska’s tax division is behind the effort and says that it is “extremely good news for the state.”