About Green Check
Green Check Verified is the largest provider of banking and financial services for the cannabis industry. Founded in 2017, Green Check currently services 130+ financial institutions who work with cannabis operators and maintains a growing list of 5000+ cannabis businesses in their ecosystem.
Our compliance framework has allowed financial institutions and the cannabis companies they serve to flourish despite the challenges the industry faces. We believe it is imperative to have an open, honest, and thoughtful discussion on where the industry currently stands with banking, and how to position things for the future.
As such, we have crafted this open letter to the members of the committee and the world at large to hear, from us, how this can be achieved. We will be responding to both the statements made by the panelists, and to the questions posed directly by the members of the committee.
Thursday, May 11, 2023
Dirksen Senate Office Building 538
To: The United States Senate Committee on Banking, Housing, and Urban Affairs
The Honorable Sherrod Brown, Chair
The Honorable Tim Scott, Ranking Member
Jack Reed, Robert Menedez, Jon Tester, Mark R. Warner, Elizabeth Warren, Chris Van Hollen, Catherine Cortez Masto, Tina Smith, Kyrsten Sinema, Raphael G. Warnock, and John Fetterman.
Mike Crapo, Mike Rounds, Thom Tillis, John Kennedy, Bill Hagerty, Cynthia M. Lummis, J.D. Vance, Katie Boyd Britt, Kevin Cramer, and Steve Daines.
Where the industry is today
The cannabis industry, as it stands, is a patchwork of semi-connected markets, with each state and territory approaching legalization or decriminalization differently. Despite these differences one thread that remains the same throughout: access to banking and financial services is difficult (to say the least). Even the fact that hundreds of financial institutions are serving the cannabis industry, though not as many as some might have you believe, doesn’t change that. Think of it like operating a normal small business with the difficulty settings turned all the way up.
The SAFE Banking Act as written in its most recent version addresses these hardships head on. While not a perfect bill, it does address the key pieces we believe to be imperative for the future success of this industry: safety, equitable access, legitimacy, and regulatory consistency.
In terms of safety, it comes down to two distinct points; safety for workers and business owners and safety for financial institutions.
Cash is perhaps the riskiest payment method out there, which is one of the reasons why the world has largely moved away from it. Because it’s hard to track, it attracts the attention of criminals, making it a problem that plagues the dollar store industry, as outlined in this article about a Dollar General store that was robbed four times in three months:
“Daniel Rosenberg, director and coordinator of the nonprofit Crime Stoppers of Central Indiana, said that people also choose to rob these stores over, for example, a Walmart because dollar stores generally carry cash. Given that most items cost under $10, shoppers tend not to buy on card. The same is true for convenience stores and gas stations, he said.“
Cash attracts criminal interest, and when a cannabis business isn’t banked, they’re made a target, one that’s easily more attractive than a dollar store because they’re not selling items under $10. For instance, an eighth of cannabis flower, the most common amount sold at a dispensary, on the lowest end would cost between $20 and $30. Plus, unlike the dollar store, the dispensary isn’t able to take its earnings to the bank at the end of the day. An unbanked dispensary quickly accumulates a literal pile of cash and there’s a certain element that will exert as much pressure as necessary to take that with them. This has, and will continue to, result in violence perpetrated against the staff of cannabis businesses. That crime will also have a follow-on effect of cultivating fear in the community and distrust of cannabis businesses.
The SAFE Banking Act would allow for increased services by financial institutions that would effectively remove the “all cash” nature of this business, a major point of concern brought up by Mr. Brown, Ms. Packer, and Mr. Oyefeso multiple times in their testimony.
This could take the form of allowing credit card companies to service the industry, or more broadly for common digital payment methods to become available. Therefore reducing the amount of cash on hand that cannabis operators currently deal with.
For financial institutions, SAFE removes many of the perceived barriers that currently preclude them from participating in this growing industry.
Equity is a central point within the cannabis legalization movement. …