Closer to a complete revamp of the cannabis industry’s finance structure? What are the next steps?
Cannabis sales from best seed banks are expected to surpass $30 billion in the United States by the year 2022, according to a recent report. The cannabis industry, which is still mostly unbanked and underbanked, now has a great deal of opportunity to benefit from financial institutions’ services as a result of this development. A financial institution’s board of directors and executives in the C-suite cannot afford to ignore the potential impact that cannabis might have on their organisation in 2022, regardless of whether or not they intend to bank it. Some trends to watch in this industry include the ones listed below.
Marijuana is likely to be decriminalised in more states by the year 2022
On the Ballotopedia website as of September, there is information on over a dozen possible marijuana legalisation measures. In Wyoming, Idaho, and Mississippi, attempts are being made to legalise medical marijuana. in Nebraska, medical marijuana and adult-use marijuana are being considered; and in Arkansas and Ohio, adult-use marijuana is being considered. Because it is the only state in the union that has not loosened the legal restrictions on the possession or use of marijuana, legalising marijuana in any form in Nebraska would be significant.
Licensing and sales of cannabis will be permitted in states that have legalised or extended their programmes as of 2021
Cannabis-related companies (also known as MRBs) must be licenced before they may begin selling marijuana to customers. The procedure does not end with the governor’s signature. A newly formed marijuana regulatory authority will need to build the real laws, or infrastructure, over the course of several months in order to make licencing and sales possible if marijuana is become legal. It is anticipated that retail sales of marijuana in the states that legalised it in 2021 would not commence until at least 2022.
Federal legislation on marijuana is not certain to be approved in 2022
Federal authorities would be unable to penalise financial institutions that give services to state-legal MRBs under the SAFE Banking Act, which is the most attractive piece of legislation for financial institutions. The Federal Financial Institutions Examination Council (FFIEC) would also be required to create uniform methods for the review of marijuana banking programs, as well.
Financial services for the cannabis sector will be “nice to have” rather than “unavoidable” by the year 2022
Cannabis banking programmes are being established by an increasing number of financial organisations since failing to do so may result in the loss of valuable customers. An agricultural family member from the Midwest, for example, contacted a bank in the area to inquire about getting funding to start growing marijuana. Although they had a long-standing relationship with the bank that spanned many generations, they were open and honest about their plans to go elsewhere for financial services in the future.
Cannabis banking activities must begin by 2022 or financial firms risk missing out on significant customers
A growing number of banks are creating new business lines to take advantage of this market or, at the very least, avoid losing clients to it due to broad de-stigmatization, state-by-state legalisation, and the enormous revenue potential afforded by this sector.