Oklahoma’s cannabis industry has thrived. Today, there are thousands of licensed growers, processors, and dispensaries contributing to the market. However, one major challenge persists: limited access to banking services.
Cannabis is still classified as a federally illegal substance. As a result, financial institutions may not want to work with cannabis businesses. This forces many Oklahoma operations to find alternatives.
Let’s see how the industry is navigating these hurdles and breaking down the financial barriers in Oklahoma.
Why Banks Are Hesitant to Work With Cannabis Businesses
While medical cannabis is fully legal in Oklahoma, federal law still classifies it as a Schedule I drug. As a result, that creates a huge gray area for banks.
Financial institutions operate under federal regulations. If they work with a cannabis business, they could be at risk of violating federal anti-money laundering laws.
Banks do not want to put themselves in a position where they could receive fines or lose their federal deposit insurance. Most will avoid those risks.
The Impact on Cannabis Businesses
For cannabis businesses in Oklahoma, this makes day-to-day operations more difficult.
Since there is a lack of access to traditional banking, many cannabis businesses rely on cash-only transactions. While this might seem manageable, it can be a logistical headache. Counting, storing, and transporting large amounts of cash is not just inconvenient, but it can be risky.
Plus, there is also the issue of transparency. These businesses can have a harder time keeping accurate sales records outlined by the Oklahoma Medical Marijuana Authority. That can make tax compliance tricky. Even a tiny error in reporting could lead to an audit or penalties.
Security is another concern. Businesses holding these large amounts are targets for criminals. Many dispensaries and growers have had to install expensive security systems or hire armed guards to protect their money.
Additionally, limited access to traditional loans or lines of credit leaves cannabis entrepreneurs funding their businesses out of pocket. That makes growing, expanding, or investing in new equipment or facilities difficult.
The cost can be substantial if you do manage to open accounts with state-chartered financial institutions. Banks that work with cannabis businesses often charge higher fees because of the extra work involved in monitoring these accounts for compliance.
What to Know When Choosing a Bank for Your Oklahoma Cannabis Business
Finding the right bank for your cannabis business in Oklahoma can be tricky. However, you need one for running a safe, efficient, and compliant operation. Here’s what to look for:
- Experience with cannabis businesses: Choose a bank that knows the industry. They will know the challenges you face and have systems in place to support you.
- Local and state-chartered options: Big banks may shy away. Those smaller, state-chartered institutions are more likely to work with cannabis businesses in Oklahoma.
- Transparent fees: Cannabis banking can come with extra costs. Make sure the bank is upfront about fees so there are no surprises.
- Compliance knowledge: A good banking partner will help you comply with state and federal laws. In turn, that can keep your business secure.
- Payment flexibility: Look for a bank that offers digital payments, ACH transfers, or payroll services to cut down on cash transactions.
- Check their reputation: Talk to other cannabis business owners, read reviews, and make sure the bank has a track record of reliability in the industry.
- Plan for the future: Choose a bank that can grow with you. That could mean offering loans, financing, or other services down the road.
Cannabis and Banking: Find an Option for You
Breaking down the financial barriers in Oklahoma can be tough. But the right financial partner will make your day-to-day operations smoother, safer, and less stressful. If you would like to partner with a legal team versed in cannabis law, Brune Law Office is here to help. Contact us to schedule your consultation by calling (918) 876-0408.