The Value of Relationships

As we prepare to gather around the Thanksgiving table with friends and family, we are reminded of the importance of community. Mission-driven financial institutions are keenly aware of their role in the community and the importance of building strong local connections.

When it comes to building a cannabis banking program, relationships are paramount. To guard against the risks of this industry, banks and credit unions should be prepared to invest time, energy, and resources in establishing and maintaining strong relationships with key stakeholders. The following groups are particularly important:

Your Local Community

While reputational risk continues to decline as the overall acceptance of cannabis increases, there will be those who oppose this market. Financial institutions serving or considering serving cannabis-related businesses (CRBs) should be prepared to address concerns raised by members of the community. Having a solid justification for why the financial institution is serving the market, grounded in its service to the community, is critical to mitigating reputational risk and establishing strong relationships with the community.

Cannabis-Related Businesses

Unlike traditional banking relationships where customers are generally not exposed to compliance activities at the financial institution, CRBs must be active participants in their own compliance. This requires frequent interaction between the operator and the financial institution to ensure full transparency. Shield’s platform enables banks and credit unions to vet and onboard potential customers and access critical account and transaction data all while delivering a positive customer experience. Establishing a point person or a small team dedicated to this line of business can also help bankers become trusted partners with CRBs.

Board of Directors

Sometimes, resistance to serving CRBs can come from the Board itself. Educating board members about the risks and how the institution will meet its compliance obligations will allow them to evaluate the program, establish clear policies, and provide informed guidance to the management team.


Maintaining open and transparent relationships with regulators is a cornerstone of cannabis banking. While regulators will not endorse a cannabis banking program, they can offer valuable feedback on their expectations and any concerns they may have.

Engaging with experts in the compliance, audit, and BSA/AML space who understand the cannabis industry and operational requirements can be instrumental in ensuring banks and credit unions are set up for success. 

Have questions about cannabis banking? Contact Shield ›

What Does Descheduling Cannabis Mean for Cannabis Banking?
Although it’s too early to know how the outcome of the midterm election will impact federal law related to cannabis, one thing we know for sure is that reform is inevitable. So, what will this mean for banking this line of business? I continue to maintain that descheduling or legalizing cannabis will not dramatically change the due diligence bankers will need to perform to ensure they are only accepting funds from the legal market.

Demand for banking services still outstrips supply in many parts of the country, so there’s a significant first-mover advantage for those willing to participate in this line of business today. By establishing policies and procedures, implementing an effective technology platform, creating a scalable pricing structure, and developing expertise and relationships now, banks and credit unions will have a competitive advantage when legalization eventually occurs, and more financial institutions enter the market.
Meet Us This Week at MJBizCon
We’re in Las Vegas for MJBizCon! Please use the link below to schedule a meeting with us.

Please also attend our panel discussion at CannaVest West:

Canna-Money: Fact, Fiction, Forecast
Thursday, November 17 at 2:00pm
Las Vegas Convention Center

Schedule a meeting with Shield at MJBizCon ›
Shield in the News
Shield and our client, Credit Union 1, were featured in the Fall Issue of CUNA’s Credit Union Magazine: Jenna Myer, Shield’s Director of Client Success, was featured in a video interview on CU Insight: We wrote about how current economic conditions are impacting financial institutions in our article, “Boost Your Balance Sheet with Cannabis Banking."Boost Your Balance Sheet with Cannabis Banking."

Visit our Insights Page for More Articles ›
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Shield Compliance transforms how financial institutions manage risk, comply with regulations, and satisfy operational demands associated with serving the legal cannabis industry. Shield’s technology sits behind the financial institution, powering its compliance and risk management operations in the background. This approach enables financial institutions to grow their portfolios and gain an early-mover advantage on new relationships and the added revenue from these customers while protecting themselves from the risks associated with banking this industry.
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