How To Make Your Financial Institution More Appealing to Cannabis Businesses

It takes a bit of extra work to build rapport and trust with cannabis related businesses. Here are six tips all FIs can use to grow their CRB programs.

Cannabis operators and financial institutions (FIs) have a rocky history. And yet, willing, knowledgeable financial partners are sorely needed in the industry. If you’re considering developing a cannabis banking program at your institution, there’s immense opportunity — it just takes more careful planning and messaging than it might for other sectors. These six tips can set you up for success as you build out and market your cannabis related business (CRB) banking program.

1. Lead with trust

Financial institutions often have to fight an uphill battle to demonstrate to CRBs that they can be trusted. Many cannabis operators have been burned by a formal financial partner in some way, which can make some skeptical when getting to know a new financial partner for the first time.

Building trust from the get-go is key to cultivating the right reputation in the cannabis sector. This starts with treating a cannabis business with respect. Although deeper scrutiny is required for compliant banking, approach sensitive discussions with a cannabis operator as a partner, not as an interrogator. Remember: you’re working together to build a healthy financial future for your client.

Reassuring cannabis operators that they are in reliable hands is also warranted. Make sure to communicate that you’re happy to work with their business. Be transparent about your FI’s processes, so the companies know what to expect in terms of essential processes like reporting and extra paperwork. It’s worth the time to develop checklists, step-by-step instructions, and other documentation that helps reassure a cannabis operator that you’re knowledgeable, transparent, and most importantly, here for the long haul.

2. Demonstrate cannabis expertise

The cannabis industry is unique in a lot of ways, so the more expertise you can demonstrate to CRBs, the better. If you don’t already have a portfolio of cannabis companies under your belt, there are still steps you can take to show you know the space and understand the needs of CRBs.

First, start by making sure each of your team members are up to date on the latest regulations and trends facing the industry. Consider sending team members to get their cannabis banking certification through a program like the Accredited Cannabis Banking Professional Certification program. Obtaining this certification demonstrates that your staff knows Financial Crimes Enforcement Network (FinCEN) regulations, due diligence requirements, and sales validation and account monitoring techniques. It also gives your staff the common language to meet CRBs where they are and explain your offerings in a way that’s relevant to their experience.

It’s also a good idea to analyze other state cannabis programs and compare them to the jurisdictions in which your financial institution operates. Take lessons from how these programs evolved and the way financial institutions have served (or failed to serve) CRBs in those markets. These lessons can help you fill the gaps in your own program and provide the most value possible to the clients you hope to serve.

3. Make the application and onboarding process easy

Cannabis professionals and entrepreneurs have a lot to manage, so do your best to make your application, approval, and onboarding processes as easy as possible. Provide clear and direct guidance on what you need from them, including the required cannabis banking documents, sales data, ownership information, licensing, and more. Provide ongoing communication and set clear expectations around application processing timelines and when applicants can expect to hear back.

Once you’ve approved an applicant, guide them through the necessary steps to set up account monitoring. Work with them to get the necessary software systems in place and provide insight on what they can expect in terms of reporting. Be clear through the process about what’s needed from the CRB’s side and give regular progress updates as onboarding proceeds.

The same ease of process holds true for FIs. Green Check Verified offers a complete software solution that streamlines due diligence for applicants, account monitoring, simplified FinCEN reporting, and more tools to get new clients onboarded and banking with you quickly and seamlessly.

4. Explain your compliance processes and why they’re important

While many cannabis operators are tangentially aware of FinCEN compliance, they may not know why it’s important or how it affects FIs and the due diligence you must perform. As part of your introductory process, be clear about why you need visibility into certain systems and financial reports to reduce feelings of invasiveness on the part of your clients. This not only establishes trust with your new client, but educates cannabis operators so they can be better partners as they grow their business.

5. Take a consultative approach

Your CRB banking program is a treasure trove of data that you can use to help your clients grow. When you use a platform like Green Check Verified, you’ll have detailed deposit data and financial information at your fingertips, which you can use to identify trends and spot potential trouble spots.

Make it a point to share some of these insights with your clients. All collected data is compliant and anonymized per the relevant, required rules and regulations. You can draw from this information to inform coaching calls as part of your due diligence processes. By providing this added value to your clients, you’ll be more than a financial services provider, you’ll be an instrumental partner in their success.

6.Build a network with trusted businesses

To be successful in cannabis, you need trusted connections, so network early and often to establish key partnerships with other financial institutions. As you develop these relationships, don’t hesitate to refer your clients to financial institutions who provide services you don’t. After all, it can be difficult for CRBs to find cannabis-friendly financial services, so anything you can do to make it easier is a big help.

Not sure where to start when it comes to cannabis networking? Green Check Connect is a marketplace of cannabis-friendly financial institutions and verified CRBs looking to connect with one another. Everyone in the Green Check Connect marketplace is vetted thoroughly to ensure only reliable, trusted organizations are listed, getting you on a great head start from the get-go.

Additional valuable marketing activities include:

  • Joining a cannabis trade association
  • Exhibiting at a cannabis trade show
  • Hosting webinars about cannabis banking
  • Secure speaking engagements at cannabis events

Green Check is your guide to the cannabis industry

At Green Check, we’re bridging the gap between the finance and cannabis industries. Cannabis businesses are just like any other industry, in that they need access to reliable, comprehensive financial services. That’s where financial institutions like yours come in, but you don’t have to go it alone. By partnering with Green Check, you can develop your CRB program, screen applicants, and continue to supply cannabis-friendly services to the businesses that need them most. Start building trusted relationships that will stand the test of time — get started with Green Check today.