Credit Union to Serve Recreational Cannabis Businesses

[dropcap class=”kp-dropcap”]T[/dropcap]he GFA Federal Credit Union recently announced that it will cater to recreational cannabis businesses beginning on Oct. 1. During a time when few banks are willing to risk drawing attention by federal regulators—banks like this are sorely needed in states with legal cannabis.

Gardner, Massachusetts-based GFA Federal Credit Union will begin to offer cannabis businesses across New England with cash management, checking accounts, payroll, wire transfers and bill payments. Massachusetts’ recreational cannabis market sales could begin within days, and the timing couldn’t be better.

“We’re looking at a cannabis business as a legitimate business that wants to be recognized as such and that, without banking services, presents a tremendous public safety issue in our communities,” GFA CEO Tina Sbrega told The Boston Globe “Otherwise, you’re talking millions and millions of dollars of cash on the street.”

Currently less than four percent of U.S.-based financial institutions are willing to cater to cannabis businesses. This is due to the threat of federal regulators taking away licenses for conducting business related to a federally illegal substance.

GFA Federal Credit Union has opened seven branches in Massachusetts, and two in New Hampshire, with $500 million in assets. The credit union is utilized its subsidiary and joining forces with Safe Harbor, a firm that provides banking services to cannabis businesses created by Partner Colorado Credit Union in Denver, Colorado.

Several states have attempted to fix the current banking dilemma that cannabis businesses face. Last month, the California State Assembly rejected a bill that would have created a state-chartered bank to cater to cannabis businesses in the state.

The credit union will start out slow, and contract with 15-20 cannabis businesses during its first year of services. Small businesses however won’t be able to qualify for a loan. Local authorities hope other local credit unions will follow GFA’s example.