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A Conversation with Oklahoma State Bank: Create a Ready-to-Scale Cannabis Banking Program (Part 1)

As one of the earliest providers of cannabis banking services in Oklahoma, Oklahoma State Bank understands the compliance and operational requirements associated with serving the legal cannabis industry.

Since launching its cannabis banking program in January 2020, OSB today serves over 300 cannabis-related business (CRB) customers. In the first of a two-part series, Delene Gilbert, Director of Cannabis Banking, and Ann Roberson-Keawe, Vice President and Operations Compliance Officer, share why Oklahoma State Bank (OSB) decided to serve this line of business, how they meet the compliance requirements of the industry, and what CRBs need to understand about banking relationships.

Why did Oklahoma State Bank decide to enter cannabis banking?

Delene Gilbert, OSB

Delene Gilbert (DG): Every bank that has opened its doors to this line of business sees the advantages of being able to offer this kind of product. We did a lot of market research and due diligence to understand how we could offer this service and build a product for the Oklahoma market. We also saw an opportunity to introduce a strong source of low-cost deposits and non-interest-bearing cash flow to support growth within the bank. But we also wanted to do it right, so we researched the compliance requirements and FinCEN guidance and developed a clear understanding of how we could provide banking services to legal cannabis businesses because we believed they deserved just as much of a right to have a banking relationship as other traditional businesses.

What do bankers need to know about compliance requirements for this industry?

Ann Roberson-Keawe

Ann Roberson-Keawe (ARK): It all goes back to knowing your customer and having a deep understanding of the Bank Secrecy Act. But that’s only the beginning. You have to go above and beyond to ensure you have a clear line of sight into the ownership structure and that there’s full transparency into the members’ business and operations. Specialized compliance software is an investment, but regulators are increasingly expecting banks to have cannabis-specific compliance software in addition to traditional AML products.

What features did you look for when selecting Shield as your cannabis banking partner?

DG: When we set out to select a compliance partner, the first thing we evaluated was their experience in this industry, their knowledge of different markets, and how their product addressed our specific needs. It was important that the compliance platform we selected could evolve with us as our program grew and our members became more sophisticated. We also recognized the value of a compliance platform that streamlines customer onboarding and underwriting – which I’m sure most readers will agree is a headache in itself – and is automated and intuitive to a cannabis business's needs compared to a traditional business.

It was important that the compliance platform we selected could evolve with us as our program grew and our members became more sophisticated.

As Ann mentioned, there’s an upfront cost associated with investing in cannabis compliance software, but you also need to ask how it can help you grow your program at a responsible rate while meeting the compliance requirements of the industry.

What do you want CRBs to know when preparing to work with a financial institution for the first time?

DG: One of the most challenging aspects of our program is explaining our pricing because it is considerably different than traditional business banking. For financial institutions to offer cannabis banking services, CRBs need to understand that they are just as regulated, if not more regulated, than the business itself. There’s a high cost associated with the staffing, security, and other requirements to provide banking services to this industry.

Partnering with experts to assess risk, evaluate and implement compliance technologies, and develop policies and procedures will help financial institutions create the foundation for an effective and competitive cannabis banking program.


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