How Green Check Helped Valley Bank Serve More Cannabis Clients

As access to cannabis banking services improves, the myth that only community banks and credit unions serve the industry stubbornly persists. The truth is, cannabis businesses can find compliant, reliable banking services from national banks. The experience of Valley Bank, which serves cannabis-related businesses (CRBs) in 29 states, is a prime example. 

“Valley Bank is one of Green Check’s earliest clients, and it’s really been exciting to see their program evolve to become a best in class cannabis banking program,” said Erik Sapp, VP of revenue operations at Green Check.

Here’s how Valley Bank built its cannabis banking program into a national success with Green Check’s help, proving that cannabis banking can be done on a large scale.

From waiting for reform to serving cannabis businesses

Headquartered in Morristown, New Jersey, Valley Bank has been in operation for nearly 100 years. The bank operates more than 200 branches, has $62 billion in assets, and manages more than $50 billion each in deposits and loans for businesses. 

Valley Bank focuses on commercial banking, but that focus didn’t mean they were rushing to service the legal cannabis industry. Initially, the cannabis banking team devised the outlines and infrastructure of a cannabis program, with no plans to launch until if and when the Secure and Fair Enforcement (SAFE) Banking Act, or similar legislation, was signed into law.

After their research, however, it wasn’t long before the compliance team concluded there was no reason to wait. They determined that Valley Bank could begin serving state-legal cannabis businesses right away, fully within the guidelines set out by the Financial Crimes Enforcement Network (FinCEN). 

“As we evaluated the legal and regulatory landscape, we came to the conclusion that we didn’t have to wait,” shared Jennifer Yager, head of Financial Crimes Compliance at Valley Bank. “The fact is that there had been no pattern of regulatory actions against banks solely for serving cannabis businesses.”

Once that determination was made, the team presented a plan to the executive leadership team and Board of Directors. Bank leadership agreed there was a strong business case for serving the cannabis industry, and gave the green light for the team to devise a pilot program.

“From there, we previewed our plan with the regulators and then launched into a pilot program,” Yager recalled. 

 

If your financial institution is considering serving the industry, check out these reasons to offer services to cannabis businesses to see why it’s worthwhile.

Building a cannabis banking program from the ground up

Valley Bank started small, launching its cannabis banking services with just five clients as a proof of concept. The pilot program focused solely on medical cannabis businesses in its home state of New Jersey. That pilot program was a success, paving the way for the bank to expand into additional markets.

Four years later, Valley Bank now serves medical and adult-use cannabis businesses in 29 states where cannabis is legal. Multi-state operators (MSOs), microbusinesses, and social equity license holders are among their varied client base.

“We are a national bank; therefore, we’ll bank any state that fits our program,” shared Caroline Colone, director of Specialty Banking Services at Valley Bank. “We service all types of cannabis-related businesses, from entities that are directly engaged in the production, sale, or distribution of cannabis to the ancillary businesses that provide services to the industry.”

WATCH: Learn more about Valley Bank’s journey with Green Check.

How Green Check supports Valley Bank’s cannabis division

When it comes to cannabis banking, transparent data is critical to demonstrating compliance. Banks need to know that the money coming in from cannabis clients are related to legitimate, state-legal cannabis transactions. Doing so generally means adopting a software platform that’s capable of tracking sales and verifying them as compliant with state regulations.

“As we thought about moving our program from paper to practice, we knew there’d be considerable compliance burdens. So, we looked to create processes that could be automated and scalable, and we knew we’d need technology to help,” Yager said.

Valley Bank are financial experts, not software developers, and they didn’t have the resources to build out their own system from scratch. This is where Green Check came in. Our platform provided the bank with the data needed to guarantee FinCEN compliance.

“We liked Green Check because their approach to pulling in the point of sale transaction information gave us the most visibility and detail into those transactions,” Yager said. “This enabled us to be comfortable with the transactions and ensure they were from state-legal cannabis businesses.”

Learn more about how Green Check Verified helps financial institutions authenticate the legitimacy of cannabis transactions.

In addition to Green Check’s robust data reporting and sales verification capabilities, its simplicity in terms of implementation and usability set it apart, Yager recalled. Valley Bank wanted to get its pilot program going and needed its new tech platform to accelerate that process. Green Check’s cloud-based software and intuitive user interface made it easy to set up and start doing the work without delay. 

“Green Check wasn’t a heavy lift to implement. It was easy to get off the ground and get moving with our first five pilot customers,” Yager added.

Once Valley Bank was ready to expand, Green Check’s scalability made it easy for the bank to bring on more clients. Thanks to the seamless integration with cannabis POS, seed-to-sale and inventory  systems, it’s easy for bank compliance personnel to verify that transactions line up with client deposits, keeping their program compliant.

Starting a cannabis banking program? We have your back

Launching a cannabis banking program is possible with the right partner in your corner, whether you have 20, 200, or 2,000 branches. Green Check not only provides the technology needed to support a compliant program, but also offers partnership and expertise that streamlines the pathway to launch. Valley Bank is a prime example of how to successfully start and grow a cannabis banking program, and Green Check was with them every step of the way. Get started with Green Check today to build your program.