[author: Jenna Meyer]
The CannaBusiness Advisory Spotlight Series features expert perspectives from Burns & Levinson clients and contacts who are blazing new trails in the cannabis market.
Today we spotlight Jenna Meyer, Vice President of Client Success at Shield Compliance. Shield is a BSA/AML compliance platform for banks and credit unions serving cannabis-related businesses. The Shield compliance management platform aggregates financial institutions’ transaction data and demographic records with restricted and publicly available information from state and local governments, seed-to-sale tracking, and client financial statements.
- From your corner of the cannabis industry, what’s the single greatest challenge right now?
While many cannabis-related businesses (CRBs) still struggle to find banking and financial services, the biggest challenge now is finding compliant payment options for their consumers. The industry is still so heavily cash-based, which can be a security risk for companies. Studies show consumers are likely to spend more money when using a card rather than cash, but there are no great options for card-based payment solutions for consumers at cannabis stores. There are a lot of companies out there promoting different debit card or cashless ATM options, but many are not compliant. Mastercard’s crackdown on cannabis payments last summer created major confusion and challenges for licensed operators and their customers. The move also forced licensed operators (and worse, illegal operators) to employ workarounds to mask transactions, hampering regulatory and law enforcement efforts aimed at supporting the legal cannabis industry.
We are nearly 10 years into adult use legalization and hundreds of national, regional, and community banks and credit unions across the country are providing financial services to licensed cannabis businesses, operating within the guidelines offered by FinCEN and passing their regulatory exams. Other forms of traditional payments such as wires, ACH, and checks are clearing and being processed on national systems at staggering volumes. It begs the question: Why can’t the card brands do the same?
I had an opportunity to meet Jim Cole at the PBC conference last year, ten years after the eponymous Cole Memo was released. Interestingly, some of the original concerns the Cole Memo was written to address are the same issues we’re seeing today with the lack of compliant card-based payment options, such as large amounts of cash on hand in dispensaries and the potential for violence and robberies. While the Cole Memo brought many financial institutions to serve the industry, CRBs still struggle with securely handling, transporting, and depositing significant volumes of cash.
- How does your business solve issues related to this challenge?
At Shield Compliance, we bring compliant financial services to the cannabis industry. We offer a purpose-built BSA/AML compliance management software solution that transforms how financial institutions manage risk, comply with regulations, and satisfy operational demands associated with serving the legal cannabis market. We look at the entire customer relationship lifecycle and offer a set of products that facilitate everything from new client applications and underwriting to daily compliance management and reporting. We also introduced Shield Force, a service offering for financial institutions requiring additional compliance staffing support to maintain or expand their cannabis programs.
We also partner with industry leaders to help financial institutions navigate the complexities of this market. For example, we joined Simplifya and Ceylon Solutions to launch Cannabis OneClick, a marketplace for licensed cannabis and hemp operators to quickly and easily find the top-rated and most experienced service providers in the industry. The services available on the Cannabis OneClick platform include banking, insurance, legal, compliance, payroll, delivery, cash logistics, point-of-sale, software development, and search engine optimization.
We also partner with the newly formed American Cannabis Banking Association (ACBA) to advocate for clear, streamlined, and practical banking regulations for CRBs and build more trusted relationships between licensed cannabis operators and the financial services community.
Our Open Letter calling for the nation’s leading card brands to reverse their policies of prohibiting financial institutions from offering payments services connected to their networks to licensed cannabis merchants has generated strong support in the industry. We invite you to the letter at www.fairbankingnow.com.
- Tell us about a situation you’ve encountered that could only happen in the cannabis industry.
A banker recently shared a story about a customer who always whispered the word “cannabis” when she called with questions. It’s a common sentiment – people feel like they have to hide that they’re in the industry when speaking to providers such as banks, accounting firms, etc., even when they are legal, licensed businesses.
At a conference recently, I had a few people stop by and tell me that they wanted to know more about cannabis banking for their institution but felt a little uncomfortable asking. Here’s how I see it: Whether you are a customer of the industry or not, or agree with the industry or not, financial institutions are providing a service to their customers by providing cannabis banking. That’s the important thing! And – there is never anything wrong with asking questions and learning more about anything!
- If you could travel back in time by ten years, what would you tell your former self about the industry?
I wish I had known more about the emerging cannabis industry back then! Ten years ago, I was very focused on the commercial lending side of financial institutions, and cannabis banking wasn’t really on my radar. I’m based in the Midwest, and at the time, cannabis wasn’t legal in many states in this region.
Five years ago, I was just learning about the industry. Tony Repanich, Shield’s president and CEO, was a former client of mine, and I remember being surprised when he started working in the industry. He is a great banker and a very savvy businessperson, so I knew I had to learn more. I’m so glad I got involved when I did. It’s been an amazing industry to be a part of. I wish I had gotten involved sooner!
