For the cannabis industry, banking has long been a daunting challenge that has landed some in hot water. Fincann builds solutions to help compliant cannabis businesses gain access to genuine, transparent banking. Their growing team assists clients by creating working relationships with banks, educating financial institutions on the cannabis industry, and offering fully transparent merchant processing solutions. The Fincann brand represents trustworthy guidance for cannabis businesses to bank sustainably in a consistently evolving industry.
Before founding Fincann in 2017, Nathaniel Gurien spent time learning about the industry banking payment space to ensure that entry would provide value. He describes that time as more aspirational, but now Fincann unequivocally provides compliant, transparent business bank accounts and merchant processing services for any compliant operator, in any sector, in all 50 states. But until 2021, they didn’t advertise at all, instead choosing to develop slowly as an ethical industry player. In cannabis banking, building trust is essential.
While Nathaniel researched banking in the industry and learned about the challenges, he noticed that many “experts” were just repeating things they had heard about banking in cannabis rather than providing accurate information. To the day, people continue to claim that 700 banks were banking with cannabis businesses, which would be more than enough to serve those who need accounts. But this was misinterpreted data from a periodic FinCEN report regarding suspicious activity reports filed that year. That misinformation inspired the Fincann Official Cannabis Friendly Bank Counter, a recent addition to their company website. The real-time counter displays how many financial institutions are actually banking with cannabis companies, broken down by the business sector. Other features include an interactive map with real-time updates, state-by-state marijuana and hemp regulations including original source documents, detailed compliance guidance, and industry news filtered by legal, banking, domestic, and international categories. These are several of many ways that the team is building out their site to be a trustworthy source of accurate and comprehensive information on cannabis banking, merchant processing, and financial services.
Another glaring piece of misinformation they hear all the time is the claim that we need federal legislation to open up cannabis banking. Yet years ago, for example, federal bank regulatory agencies, e.g. FDIC, OCC, and NCUA went on record that they do not penalize or sanction the financial institutions they examine simply because they maintain compliant cannabis-related accounts. The truth is that there are no meaningful federal impediments to cannabis banking.
When Nathaniel sought out conversations with Boards of Directors at various financial institutions, it became clear the nub of the problem boils down very simply to a long-standing one-sided prejudice on the part of mostly conservative mainstream bankers. In one instance, Nathaniel called 50 banks in Nevada proposing to make a complementary high-level presentation of the risks and opportunities of banking the industry, and not one would take a meeting.
“To the extent that they begin to feel different about it, they will open up,” said Fincann founder Nathaniel Gurien. “We try to revise and evolve how they feel about it, directing our initial presentation to younger, less conservative middle management, and once they begin to feel more comfortable, we can help them develop a rational approach.”
Fincann educates bankers on the truth behind Reefer Madness-era stigmas and the political origins of prohibition. They discuss the dangers of permitting their local business communities to be awash in cash transactions with its implications for organized and violent crime. And as bankers look around and see the obvious medical and wellness benefits of cannabis, and that the ‘sky hasn’t fallen in’ as predicted in early legal states, they become more comfortable and open to re-thinking their view of our industry. Fincann also explains the wide range of businesses represented by the cannabis industry, and most find that they are doing business with cannabis companies already without even knowing. After this presentation, many are willing to conduct a formal risk assessment and consider building a compliant program for cannabis banking, through which Fincann can then introduce cannabis industry pre-qualified clients in accordance with the bank’s criteria and appetite.
Their educational mission has led Fincann to grow their exclusive Cannabis Banking Financial Network™ of banks, payment processors, lenders, and compliance vendors which they then introduce to their cannabis clients. By not being limited to one bank, processor, or solution, their open and collaborative structure combined with the wide range of companies in their network allows them to meet the needs of their industry clients. Fincann is a client-centric advisory company – they work with financial institutions to evaluate and build compliant, sustainable cannabis banking programs and they build detailed business profiles for industry clients to introduce them to the optimal bank, processor, and/or lender to fit their needs. On both the banking and industry sides, this client base continues to grow based on word-of-mouth recommendations acquired through trustworthy working relationships.
“One of our features is that rather than working for a company that has one solution, or a single bank, we represent and refer people to any one of numerous trusted colleagues who have legitimate and suitable solutions, platforms, and banking and financial services,” Nathaniel said. “We collaborate with most of the folks that have gateway access to their client banks and that’s more choices that we can offer to our own clients.”
Their client satisfaction is based on the success rate of pairing compliant companies with transparent banking solutions. Another challenge in this endeavor is that some entrepreneurs don’t know the cost of doing high-risk banking. There are compliance and regulatory layers to opening a bank account as a high-risk business, and these hurdles mean it isn’t free to open up an account. In response, some ancillary businesses choose to operate without explicitly marketing their work in the industry. However, this approach can hinder growth and sales.
In one case, Nathaniel worked with a California hydroponics store that was marketing only to indoor growers, ignoring the cannabis industry altogether with no mention of it on their website. Much of the clientele comprised cannabis cultivators, and although they could maintain their current banking, they were passing up possible growth from attracting more cannabis cultivators. Fincann set them up with a transparent banking solution, and now they can promote actively and openly, continuing to increase business.
Marketing isn’t the only benefit of openly banking cannabis with a compliant institution. Companies also gain access to legal, transparent merchant processing solutions and financing once they’ve established a relationship with a bank. Fincann now officially offers solid B2B and B2C payment processing across all cannabis sectors, retail establishments included. Their merchant processing can process Mastercard, Visa, and Discover debit cards with a traditional merchant account and fairly priced under 3.5% as long as they have a verified cannabis compliant bank account and of course, if they don’t, Fincann can set them up with one.
This merchant processing isn’t a quick-fix solution that will be obsolete when regulations shift. Once credit card companies are willing to process cannabis transactions, a quick download activates MasterCard, Visa, American Express & Discover credit card acceptance at the same rate and merchant account number. This exciting new offering will skip all of the hiding and obscured business names on statements, providing simple merchant processing like that used in a corner store. They recently added a Director of Underwriting & RIsk to their leadership team to oversee compliance and protocols.
The industry is not progressing in an even, straight line for banking, payment processing, and financial services. While federal de-scheduling and legalization are likely on the horizon, some parts of cannabis finance will make progress and some will remain stalled. Nathaniel remains focused on guiding his clients through this treacherous journey unscathed.
“People in banking and the industry are going to need an experienced hand to guide them through a rapidly-evolving regulatory environment for the foreseeable future,” he said. “Fincann wants to be the best we can at guiding people through this jungle, and avoid many of the unnecessary hazards, risks, and obstacles still ahead.”
There are high-risk businesses like check cashing, money transmitters, casinos, and firearms that bank with financial institutions every day. Yet cannabis is the only one that elicits an emotional reaction rather than objective, risk management approaches from banks. Fincann has broken through to many of these institutions on their educational mission and, in turn, provides real banking solutions to cannabis industry clients.
As the industry grows and evolves, Fincann continues to pursue its core mission to resolve the cannabis industry’s irrational banking challenges as well as be the community’s first resource for dependable, actionable cannabis banking and payments information.