Shredding the Shroud; The Waning Reputational Risks of Banking Marijuana

In November 2016, Oregon based firms LT Public Relations and DHM Research conducted a survey analyzing the reputational risks of banking marijuana. In another blow to cash's position as the cannabis king, the survey concluded "a strong majority of [the public] approve of banks and credit unions offering financial services to the legal cannabis industry." In fact, most "see a partnership between financial institutions and legal marijuana businesses as desirable."

Public safety was a key concern for those surveyed. 81% of respondents cited "a lack of access to banking services and the resulting dependency on cash, [which] make marijuana business targets of crime and violence" a "very good" reason for banks and credit unions to serve marijuana businesses. Conversely, most respondents viewed federal regulations as a "poor reason" to deny financial services to the marijuana industry.

The survey also found that the reputational risks of handling marijuana clients are "largely fictional." When asked what they would do if their bank or credit union began serving marijuana businesses, 81% of respondents indicated they would keep their accounts "without concerns." Only a miniscule number of respondents indicated that knowing their financial institution serves marijuana clients would negatively affect their impression of the institution. Support for marijuana-friendly financial institutions was strongest amongst millennials, as 88% of survey respondents under 35 viewed the marijuana industry positively.

Though approval of the marijuana industry soared amongst those surveyed, big box stores like Walmart, the adult entertainment industry and pharmaceutical, oil and tobacco companies did not fare nearly as well. Disapproval ratings for financial institutions serving these businesses doubled, and sometimes quadrupled, those for cannabis complaisant financial institutions.

As the nation continues to embrace marijuana, financial institutions must open their vaults to pot profits. To ease the expensive and timely task of performing due diligence on marijuana clients, banks and credit unions can rely on third party platforms like PayQwick. These platforms have been helping banks in Washington State accept marijuana clients without worrying about these clients' compliance or exposure to money laundering. Once thought unimaginable, the changing attitude toward marijuana and third party platforms tailored to facilitating marijuana commerce prove marijuana businesses are bankable. http://bit.ly/Reputation-Risks