The cannabis market is rapidly growing due to increasing public acceptance and state-level legalization. According to New Frontier Data, the U.S. cannabis industry is projected to generate retail sales of $72 billion per year by 2030. The economic opportunities are significant, and while the risks of banking this industry are complex, a growing number of community banks are entering this line of business.
Lending is an important component of cannabis banking. Not only does it benefit the bottom line, but it also helps banks attract the most desirable operators in the industry.
Make Informed Lending Decisions
Lending to the legal cannabis industry poses unique challenges. Bankers need to be well-versed in the credit and compliance fundamentals of CRBs, which includes in-depth cash flow analysis, licensing review, and thorough due diligence on cannabis-related collateral. By recognizing these risks and adopting the appropriate risk-mitigation measures, bankers can make well-informed lending decisions.
The Shield Compliance Cannabis Lending Guide helps bankers understand and mitigate the risks associated with lending to cannabis-related businesses.
Increased Competition Demands a More Customer-Centric Approach
As competition in the cannabis banking space intensifies, bankers are under pressure to deliver more customer-centric services. When it comes to meeting their compliance obligations, implementing strategies to achieve greater efficiency can dramatically lessen the burden on both their bankers and their customers. Employing technology to automate compliance tasks and aid in ongoing monitoring can also improve the customer experience.
Shield Compliance transforms how financial institutions serve the legal cannabis market. Its purpose-built BSA/AML compliance management software solution sits behind the financial institution to simplify compliance, automate processes across multiple data sources, create efficiencies, unlock new revenue, and scale operations.
Since its inception, Shield has partnered with more than 60 financial institutions and monitored 7.1 million transactions including $31 billion in deposit volume. Year to date, Shield’s financial institution customers have earned $33.6 million in non-interest income from service charges, and as of May 31, 2023, have $857 million in deposit balances and $165 million in loans outstanding from over 5,000 CRBs representing more than 13,000 active cannabis licenses.
Get the Shield Compliance Cannabis Lending Guide
Let Shield help your financial institution unlock the benefits of serving the legal cannabis industry. Schedule a demo and download the Cannabis Lending Guide today.
