Sonoma County’s North Bay Credit Union chosen as ‘preferred’ California cannabis industry banking partner
Even as hopes for relaxed cannabis banking appear dead on arrival in the U.S. Senate, banking for multi-billion-dollar cannabis continues, and is even being recognized by the industry.
North Bay Credit Union — among the first institutions to openly do business with cannabis producers — has received the California Cannabis Industry Association’s Preferred Banking Partner designation, the credit union announced Jan. 5. The association is also a credit union client.
With 19 specialists managing about 150 cannabis accounts, the credit union has navigated through murky regulatory waters in an industry with a cash-only history.
“In the last two years, we’ve taken $500 million off the streets,” Chief Compliance Officer Carole McCormick told the Business Journal. “We’re incredibly busy.”
The credit union contracts with armored cars to pick up large loads of money from dispensaries, growers and producers that represent a legitimate source of commerce in the North Bay. It has also established a vetting system that ensures all that cash taken comes from legal sources, in order to meet federal banking regulations.
Since cannabis is still considered illegal as a Schedule 1 drug by the federal government, many of these companies are unable to have traditional banking accounts to make transactions like other industries.
Moreover, the banking world fears of doing business with cannabis companies increase the chances of drawing attention from banking regulators. This is despite California being one in more than 30 states that have passed laws legalizing adult-, recreational or medicinal use.
“Banking is one of the biggest issues the industry faces. It’s a safety issue. There are companies with duffel bags of cash. North Bay Credit Union took a chance on the industry when it was not financially fashionable,” association Executive Director Lindsay Robinson told the Business Journal.
Most interactions between the credit union and the Sacramento-based association are handled electronically, but Robinson has gone out of her way with occasional trips to Santa Rosa.
“Safe and reliable banking helps weed out the illegal market,” Robinson said, adding she believes the credit union’s program may be a model for an industry estimated to have surpassed $1 billion in annual state tax revenue in 2020.
Nor Cal Cannabis CEO Jigar Patel, another North Bay Credit Union client, said having a traditional financial institution handle the transactions for his cultivation, production and distribution company goes a long way.
“My employees can get a loan and refinance,” he said. “Our industry has been fighting for credibility for a long time, with regulatory hurdles.”
Patel is hopeful for the day when his industry can rest comfortably, not having to be placed under the microscope.
This year, many eyes were on the U.S. Congress to pass laws to ease the burdens of having to balance the needs of these legitimate businesses in their states and alleviate the feds’ constant scorn. Both the Marijuana Opportunity Reinvestment and Expungement (MORE) and Secure and Fair Enforcement (Safe) Banking acts passed in the U.S. House of Representatives, only to be buried in the Senate.
Despite the MORE Act dying in the Senate, Rep. Mike Thompson, D-St. Helena, vowed it would be reintroduced in a new congressional session with a changing of the guard in the executive branch that may act more favorably to cannabis.
Susan Wood covers law, cannabis, production, agriculture and transportation as well as banking and finance. For 25 years, Susan has worked for a variety of publications including the North County Times in San Diego County, Tahoe Daily Tribune and Lake Tahoe News. She graduated from Fullerton College. Reach her at 530-545-8662 or susan.wood@busjrnl.com.
