The GFA Federal Credit Union has become the first financial institution to announce that it is opening its doors to recreational and medical cannabis businesses in Massachusetts.
The announcement, due to take effect on October 1, brings a huge sigh of relief to numerous legitimate cannabis businesses that have struggled to attain the same level of recognition as other kinds of legal businesses within the state.
GFA Credit Union revealed that it studied the legal and business sense of making its move for about a year and finally decided to open its doors to this young industry.
GFA’s CEO, Tina Sbrega, said that its decision was primarily motivated by public safety concerns regarding such huge amounts of cash being left on the street. Robberies, money laundering, tax evasion and other related crimes were likely to escalate as the industry, currently worth millions of dollars in the state of Massachusetts, was left to operate as a cash-based industry.
Her public safety concerns are echoed by law enforcement agencies who welcomed the decision to provide banking services to the cannabis industry.
To be fair, Tina Sbrega admitted that GFA stands to benefit by adding businesses in the marijuana industry to its clientele.
However, not all is rosy for the cannabis industry as yet.
Initially, GFA Federal Credit Union will only accept a limited number of cannabis businesses as clients. Those selected businesses must meet all the existing requirements for operating a recreational or medical cannabis establishment. For example, the businesses must be licensed and have a letter of approval from the local authority where that business is based.
This restriction on how many cannabis businesses will be allowed to become GFA clients will leave all the others in the cold, unless more financial institutions step up to the plate and absorb them.
Many financial institutions are likely to drag their feet on this issue since they are unsure about the likely legal complications that may come from dealing with players in an industry that is regarded as illegal at the federal level. However, it is hoped that more will eventually follow GFA’s lead in order to get their cut of the pie presented by the recreational and medical cannabis industry.
The second speed bump for cannabis businesses is that even those lucky few who are taken on as GFA Credit Union clients will not immediately have access to loans to finance their operations. The credit union says that it will consider starting loan disbursements next year.
GFA Federal Credit Union wants to use these initial months of taking on cannabis businesses as clients to study how this relationship pans out before expanding to the provision of loans.
As any optimist would put it, the step by GFA Federal Credit Union may be small, but it is a major trail-blazing step that is sure to change the relationship between cannabis businesses and financial institutions for the better. At the very least, it is a major piece of good news for companies like Green Hygienics Holdings Inc. (GRYN) and GreenBox POS, LLC (GRBX) that may sniff new opportunities for growth and expansion from this horizon that has been expanded by the events in Massachusetts.
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