Most people think cash stacking up in vaults is the biggest problem caused by the cannabis industry's lack of access to institutional banking. That is a problem, as it creates real concerns for public safety, as well as makes the industry harder to track and more ripe for illicit market diversion and money laundering.
But the lack of banking services for cannabis businesses has much more far-reaching implications that do not garner as much attention—but should.
Banking restrictions are effectively blocking nearly everyone but the wealthy and well-connected from getting into and benefitting from what is the fastest-growing industry in the country. They also are a serious roadblock to any efforts to make this industry and its wealth creation accessible to entrepreneurs from disadvantaged and minority communities that have historically borne the brunt of the failed War on Drugs.
Consider that the costs associated with launching a state-legal vertically integrated cannabis business, including the application costs, licensing fees, and startup costs, are in the neighborhood of $4 million to $6 million, at a minimum. Even opening and operating a retail dispensary to cash flow break-even costs in the range of $1 million to $2 million. >>>