NASCUS Cannabis Banking Symposium Highlights and Lessons Learned

DENVER, Colo. – June 27, 2022 – The symposium offered a complete view of the current state of cannabis banking with a mix of speakers and attendees representing credit unions, state regulators, and supporting suppliers and vendors.  All of the sessions highlighted the current challenges, lessons learned, and possible solutions.

Three key topics from the symposium:

1. The lack of federal policy to outline laws and regulations creates additional challenges for financial institutions providing services to one of the fastest-growing industries in the US.
2. A compliance-centric approach with transparency and communication is key to building the trust-based relationships required for a successful CRB program today.
3. Leverage technology to increase the efficiency of managing as many of the CRB program processes as possible.

Rodney Hood, Chairperson of NCUA, spoke passionately about the need to harmonize banking laws.  Hood said, “It is time for federal action to clarify and harmonize the laws and regulations surrounding the state-legal cannabis industry and marijuana-related businesses so that this industry can take part in the legitimate financial services industry.”  Until Congressional leaders can assemble and agree on a comprehensive Act, the growing number of cannabis businesses are served by only a small number of credit unions and banks with limited financial services who are willing to build and manage a program to serve them while managing the compliance risk.  The symposium ended with Colorado Governor, Jared Polis, stopping by and reiterating the need for national policy to meet the financial needs of the cannabis industry.

The question of how to best establish and manage a cannabis program was the focus of the conference.  There were several panel discussions focused on cannabis banking and compliance “lessons learned”.  The main takeaways were to build a program around compliance by meeting with the regulators and auditors to find out what is important to them to build your compliance policies.  The other is for credit unions to really know and understand their customers, customers’ suppliers, customers’ customers, and their affiliates.  Then have open and transparent conversations on your findings to assist them as a partner.  The goal of the relationship should be to position the financial institution as a trusted partner for the future.   

Finally, there is some unique complexity related to cannabis banking today.  Compliance monitoring involves large volumes of data from many data sources along with complex and changing regulations.  The current state is an unsustainable situation for compliance teams to do without technology.  There are three key areas in which current technologies can increase efficiencies across a cannabis compliance program. These include the ability to automate the onboarding process, the use of artificial intelligence and machine learning related to the ongoing monitoring and analysis, and documentation of FinCEN reporting. 

---

About NCS Analytics 

Since 2015, Denver-based NCS Analytics has operated under its founding principle of empowering real-time critical decision making. By aggregating diverse data streams, NCS provides governments and financial institutions with actionable intelligence to monitor and regulate high-risk industries to prevent fraud and reduce risk exposure. NCS solutions bring a new level of refinement and reliable data to emerging industries. For more information, please visit www.ncsanalytics.com.