The cannabis industry is undergoing unprecedented changes, drawing increased attention from banking institutions. New York's streetwear brand Stasharoo delves deep into the implications of these developments for small businesses in the cannabis space. We'll explore why banks are taking a fresh stance on cannabis, how it may benefit or sideline small companies, and what the U.S. government's shift from Schedule I to Schedule III means for the entire sector.
Banks and Cannabis: An Evolving Relationship
According to the Financial Crimes Enforcement Network (FinCEN), a division of the United States Department of the Treasury, over 800 banks and credit unions have filed paperwork acknowledging their relationships with licensed cannabis businesses. These figures represent a marked rise from last year, when only 553 banks and 202 credit unions had done the same.
This shift coincides with the U.S. Health & Human Services Department (HHS) recommendation to reclassify cannabis from a Schedule I to a Schedule III controlled substance. This reclassification could prove transformative, opening up avenues for financial institutions to engage more freely with cannabis companies.
Why the Change and What's at Stake?
Rescheduling cannabis to a Schedule III controlled substance could catalyze an industry-wide transformation. "This may allow dispensaries to accept credit card payments, reducing the risks and costs associated with cash-only operations," says Richard Laiderman, former head of global treasury for VISA.
According to Robert Baron, a cannabis banking expert, "Financial institutions looking to serve this market must implement risk management tools to meet their Bank Secrecy Act and customer due diligence obligations."
The Small Business Perspective
The burgeoning relationship between banks and cannabis companies might raise concerns for smaller businesses, like Stasharoo, which operate in the cannabis accessories space. An influx of institutional money may provide competition, but it could also offer smaller brands a lifeline to expand and compete on a larger scale.
NORML Deputy Director Paul Armentano aptly points out, "No industry can operate safely, transparently, or effectively without access to banks or other financial institutions." According to a Whitney Economics survey, over 70% of cannabis businesses said that lack of access to banking or investment capital was their top challenge.
The Government's Role: From Schedule I to Schedule III
Changes in the federal classification of cannabis could impact the entire industry. The DEA and other governmental bodies are keen to requalify Cannabis, thus influencing both the legal and operational landscape for smaller businesses in the cannabis and hemp accessory space, like Stasharoo.
Conclusion
The rapidly evolving relationship between banks and cannabis companies holds promise and challenges for smaller businesses in the sector. As federal legislation inches closer to reclassification, the industry could experience unprecedented growth and safety measures. While competition may intensify, the newfound accessibility to financial resources could prove beneficial for small, niche brands aiming to scale.
For more insights into the evolving world of cannabis and streetwear, keep an eye on Stasharoo. Subscribe to our newsletter and stay ahead of the curve in an industry that’s reshaping itself in real-time.
Note: This article is for informational purposes only and should not be construed as financial or legal advice.
Keywords: Cannabis, Stasharoo, Banking and Cannabis, Schedule I, Schedule III, Financial Institutions, Small Business, DEA, NORML, FinCEN, New York, Streetwear, Cannabis Accessories
For more information about Stasharoo's unique offering in the cannabis accessory space, visit our website or follow us on Instagram.