In 2016, the voters of Arkansas legalized medical cannabis, just as they have in 32 other states and five territories, but there, as in many "legalized" jurisdictions, there's been one big problem:
Cash. There's plenty of it – business is very, very good in the $10 billion sector – but there's no place to park it securely.
Most banks won't work with marijuana companies; they won't touch cannabis business proceeds with the proverbial 10-foot pole.
You can attribute that in part to former Attorney General Jeff Sessions' anti-cannabis zealotry.
Risk is almost always radioactive to commercial bankers, of course, and as things stand now, banks run the very real risk of running afoul of federal law if they handle cannabis cash – no matter that marijuana might be perfectly legal in whatever jurisdiction.
That's arguably a bigger barrier to the cannabis sector than prohibition itself, which, as we've seen, is crumbling at an accelerating rate.
But there's one small bank in Arkansas that's reaching out. It deserves to be applauded for its progressive approach and outreach to the cannabis sector. It could very well become the model for how banks provide services to these unique, very profitable companies…
About the Author
Greg Miller started working on Wall Street in September, 1987, just a month before the “Black Monday” stock market crash.
During his career there, he became an expert in just about every kind of publicly traded security - from blue-chip and small-cap stocks to municipals, junk bonds, and derivatives. As a portfolio manager, Greg was responsible for over $500 million of assets in mutual funds and insurance company accounts.
After leaving the Street, he designed a successful options trading strategy and made lucrative tech investments for a financial publication. He has also helped develop new products and worked with other editors to hone their strategies. He’s always been dedicated to deep, fundamental research - and he always will be - because he believes buying the very best companies at the right price is the best way to amass wealth in the stock market.